In a competitive market, excess demand for a good exists whenever
a. the current price is below the equilibrium price
b. resources are scarce
c. the quantity supplied at the current price exceeds the quantity demanded
d. sellers are subject to the constraints imposed by input prices and technology
e. the current price is above the equilibrium price
A
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The above figure shows the market for steel ingots. The socially optimal quantity of steel is
A) 0 units. B) 50 units. C) 100 units. D) produced if the market were competitive.
Refer to Figure 2.1. At point B, demand is:
A) small. B) inelastic, but not completely inelastic. C) unit elastic. D) elastic, but not infinitely elastic. E) infinitely elastic.
If the prices of both goods increase by 10 percent, the budget line
a. shifts to the right in parallel fashion. b. shifts to the left in parallel fashion. c. is unaffected since only relative price changes matter. d. pivots on the axis of the more expensive good.
A line graph that shows rising and falling profits over several years would have a(n)
a. A 90 degree slope b. downward slope c. varied slope d. almost level slope