Refer to Figure 3-6. The figure above represents the market for canvas tote bags. Assume that the price of tote bags is $15. At this price
A) there is a shortage equal to 55 tote bags; the price of tote bags will rise until demand is equal to supply.
B) the demand exceeds the supply of tote bags by 55. Some consumers will have an incentive to offer to buy tote bags at a higher price.
C) the quantity demanded exceeds the quantity supplied by 75. The price will eventually rise to $25 where quantity demanded will equal quantity supplied.
D) there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25.
D
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Jack exported a rare painting illegally. This transaction will:
A) cause the GDP of his country to increase. B) not affect the calculation of his country's GDP. C) cause the GDP of the country he has exported it to increase. D) cause the GDP of his country to decrease.
Using public policy to promote health can contribute to growth because:
A. workers who are in good health take more vacation days and are less likely to work. B. workers who get free health care are more likely to be careless. C. it allows the importation of more goods and services. D. workers who are in good health will be more productive and less likely to miss work days.
In international trade, an infant industry is one:
A. that protects firms that produce products for infants. B. with a large number of very small firms. C. in which the firms are experiencing very small profits. D. in the early stages of its development.
Suppose the market clearing price is $15 and the price ceiling is $16. The price that prevails in the market will be
A. more than $16. B. $15. C. $16. D. less than $15.