Describe the market process that should occur if the price of a product is below its equilibrium price; now describe what would occur if the price is above its equilibrium price, assuming no market interference
What will be an ideal response?
If price is below its equilibrium price, quantity demanded will be greater than quantity supplied; as a consequence the market price will rise due to competition among buyers. If, however, the expected price increase occurs, quantity supplied will rise and quantity demanded will decrease. In either case, the adjustment will continue until both quantity supplied and demanded are equal at the equilibrium point.
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A federal budget deficit
a. occurs when government expenditures exceed tax revenues. b. occurs when monetary policy works in the opposite direction of fiscal policy. c. occurs when tax revenues exceed government expenditures. d. occurs when transfer payments exceed tax revenues. e. will always result when Congress and the president cannot agree on expenditures.
If the exchange rate for Micromania's micros to United States's dollars is 50 micros = $1, then micros have appreciated when the exchange rate becomes
a. 100 micros = $2 b. 100 micros = $1 c. 25 micros = $0.50 d. 25 micros = $0.25 e. 25 micros = $0.75
The principle of comparative advantage asserts that
a. not all countries can benefit from trade with other countries. b. the world price of a good will prevail in all countries, regardless of whether those countries allow international trade in that good. c. countries can become better off by exporting goods, but they cannot become better off by importing goods. d. countries can become better off by specializing in what they do best.
The basis of judgment for the Standard Oil case was ________, whereas the basis of judgment for the ALCOA case was ________:
A. market concentration; interlocking directorships. B. monopolistic abuses; market structure. C. market structure; market performance. D. unfair business practices; price discrimination.