Refer to Figure 3-6. The figure above represents the market for coffee grinders. Assume that the market price is $21. Which of the following statement is true?
A) There will be a shortage that will cause the price to increase; demand will then decrease and supply will increase until the price equals $25.
B) There is a shortage that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25.
C) There is a shortage that will cause the price to increase; quantity supplied will then decrease and quantity demanded will increase until the price equals $25.
D) There is a shortage that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.
B
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Suppose the market clearing rate for apartments in Yazoo City, Mississippi is $400 per month, but a rent control is set at $600 per month. Which of the following would tend to occur in the community?
A) A shortage of apartments B) An increase in the quantity demanded for apartments C) Both of the above. D) Neither of the above.
Suppose that the current exchange rate between the dollar and peso is $1 equals 10 pesos. If the exchange rate changes to $1 equals 8 pesos, which of the following is TRUE?
A) The dollar depreciates and U.S. exports become cheaper. B) The dollar appreciates and U.S. exports become cheaper. C) The peso depreciates and imports from Mexico become cheaper. D) The peso appreciates and imports from Mexico become cheaper.
Falling transportation costs in the 19th century
a. fostered regional specialization according to comparative advantage. b. created increasing lags for price declines along the Mississippi. c. propelled the process of western expansion. d. All of the above. e. Both a and c are correct.
According to Adam Smith, what role does individual self-interest play in directing human activity?
What will be an ideal response?