According to the above figure for a gasoline market, what happens when the price per gallon of gasoline jumps from $1 to $4?
A. The market moves from a shortage of 40 million gallons/day to a surplus of 50 million gallons/day.
B. A surplus of 40 million gallons/day results.
C. A gasoline surplus is replaced by a gas shortage.
D. The market shortage is replaced by market equilibrium.
Answer: B
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If the U.S. government were to note that because drug companies can sell their drugs in Canada and make a profit at those regulated prices and impose a similar set of regulations in the U.S., this would have the effect of
A. raising the price of drugs in the U.S. B. eliminating all profit for drug companies. C. decreasing the motivation for U.S. drug companies to innovate in the future. D. increasing the motivation for Canadian drug companies to innovate in the future.
The California gold rush resulted in an increase in the amount of money in circulation and an increase in prices across the country
Indicate whether the statement is true or false
Under a price ceiling, the full economic price is
A. higher than the free-market price. B. the dollar price paid to the firm. C. lower than the free-market price. D. the opportunity cost of not being able to buy a good when a consumer needs it.
The annual volume of foreign exchange transactions:
A. is more than 18 times larger than world GDP. B. is one-eighth the world GDP. C. is three times the world trade volume. D. is small relative to most financial markets.