When there is underproduction in a market,
A. market price is too high.
B. there is a deadweight loss.
C. the total of consumer and producer surplus is maximized.
D. there is excess quantity supplied.
Answer: B
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A decrease in Swiss interest rates will cause
A) an increase in the demand for U.S. dollars and an increase in the exchange rate of Swiss francs per dollar. B) a decrease in the demand for U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar. C) an increase in the supply of U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar. D) a decrease in the supply of U.S. dollars and an increase in the exchange rate of Swiss francs per dollar.
The law of comparative advantage says that a person should produce a good if she
a. has the greatest desire to consume that good b. has the lowest opportunity cost of producing that good c. has an absolute advantage in a related activity d. has a comparative advantage in a related activity e. is equally good at producing this good as someone else is
In an unfettered free market, price is ____ predictor(s) of an event
A) the best B) only of many C) not a very useful D) a marginal
The concern of economists with respect to the trade deficit is whether it is
a. sustainable at current levels. b. desirable at current levels. c. under-specified. d. overestimated. e. the result of the financial crisis.