Which of the following statements about a price system is TRUE?
I. Prices ration goods and services.
II. Prices indicate relative scarcity
A) I only
B) II only
C) Both I and II
D) Neither I nor II
Answer: C
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According to the short-run aggregate supply curve, firms are most likely to respond to an increase in aggregate demand by raising ________.
A. prices B. production C. both production and prices D. neither production nor prices
There is a double coincidence of wants when
A) person 1 has what person 2 wants, who in turn wants what person 3 has. B) person 1 has what person 2 wants, and person 2 has money. C) person 1 has what person 2 wants, and person 2 has what person 1 wants. D) person 1 has money, and person 2 has what person 1 wants.
Suppose you purchased 500 shares of stock in 2013 for $15 a share, and the price now is $20 a share. If you sell the stock, then your capital gain is
A) $2500. B) $1000. C) $10000. D) indeterminate without knowing the inflation rate.
A consumer's willingness to pay:
A. is the maximum price that a buyer would be willing to pay for a good or service. B. is the minimum price that a buyer would be willing to pay for a good or service. C. is his or her reserved minimum bid-price. D. must always equal the seller's willingness to sell.