Which of the following is true when there is excess demand for a product in a market?
a. Price must be above the equilibrium price.
b. Price will tend to fall.
c. Producers will reduce output and sales will fall.
d. Price must be below the equilibrium price.
d. Price must be below the equilibrium price.
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From the economic point of view, what's worse, profit or loss?
A) Profit B) Loss C) They are equally bad. D) The question is meaningless as stated.
Suppose an excise tax of $1 is imposed on every case of beer sold and sellers are responsible for paying this tax. How would the imposition of the tax be illustrated in a graph?
A) The supply curve for cases of beer would shift to the right by $1. B) The supply curve for cases of beer would shift to the left by less than $1. C) The supply curve for cases of beer would shift to the left by more than $1. D) The supply curve for cases of beer would shift to the left by $1.
If market forces change the exchange rate value of one dollar from 80 yen to 83.25 yen, then the dollar has
a. appreciated. b. depreciated. c. been revalued. d. been devalued.
The local bakery makes such great cinnamon rolls that consumers do not respond much at all to a change in the price. If the owner is only interested in increasing revenue, she should
a. lower the price of the cinnamon rolls. b. leave the price of the cinnamon rolls unchanged. c. raise the price of the cinnamon rolls. d. reduce costs.