When there is an excess quantity supplied
A. quantity demanded is greater than quantity supplied.
B. quantity demanded is less than quantity supplied.
C. the market is in equilibrium.
D. prices will remain stable.
Answer: B
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Tom is stranded on a deserted island where he can only consume coconuts and crabs. Two of his indifference curves are in the figure above
a) Would Tom prefer his consumption to be at point a or at point b? At point b or at point c? Explain your answers. b) Between points a and b, what is Tom's marginal rate of substitution for a crab?
The GDP deflator in year 2 is 105, using year 1 as the base year. This means that, on average, the cost of goods and services is
A) 5% higher in year 2 than in year 1. B) 105% higher in year 1 than in year 2. C) 105% higher in year 2 than in year 1. D) 5% higher in year 1 than in year 2.
The major similarity between monopolistic competition and perfect competition is
A) the shape of the demand curve. B) that both assume many buyers and sellers. C) price equals marginal revenue in each. D) both assume products are differentiated.
What results once tradable pollution permits have been allocated to firms?
a) The government controls the price of permits. b) The total amount of pollution governed by the permit will always decrease. c) The value of pollution-saving technology is always lower than the market value of a pollution permit. d) Firms that can reduce pollution only at high cost will be willing to pay the most for the pollution permits.