A Wall Street Journal headline reads: "Cigar Shortage Draws New Brands into Market." The shortage resulted from a renewed interest in smoking cigars. What best describes the facts behind the headline?
A. A shift in supply has equilibrated supply and demand.
B. The cigar market is in equilibrium.
C. Price is too low, quantity demanded exceeds quantity supplied.
D. Price is too low, demand exceeds supply.
Answer: C
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Which of the following groups of countries are members of NAFTA?
A) the United States, Canada, and Mexico B) the United States, France, and Germany C) Japan, Canada, and Mexico D) the United States, Japan, and Mexico
$20 is to be divided among two individuals—Gary and Jamie. Which of the following allocations is NOT Pareto efficient?
A) Gary receives $1, and Jamie receives $19. B) Gary receives $19, and Jamie receives $1. C) Gary receives $8, and Jamie receives $9. D) Gary receives $15, and Jamie receives $5.
Which one of the following would benefit financially from unanticipated inflation?
A. a borrower with an adjustable rate mortgage B. a bank that has made loans at a fixed nominal interest rate C. a firm whose workers are covered by a COLA agreement D. a borrower whose loan has a fixed nominal interest rate
In the oligopoly market structure, the behavior of any given firm ________ the behavior of the other firms in the industry.
A. is independent of B. must be different from C. depends on D. must be the same as