Suppose you came across the following headline in a story of a daily newspaper: "Automobile prices are so high right now that there must be a shortage. As a consequence not everyone who needs an automobile will be able to buy one"
Is this statement necessarily correct?
First of all we have to conclude that all buyers who wish to buy automobiles at the prevailing prices will be able to do so. There will of course be others who are simply unwilling or unable to pay the current price. Secondly, we cannot say that there is a shortage at the current price. If there were then the price would simply rise to choke off the excess demand.
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Describe the three main categories of firms
What will be an ideal response?
Refer to Figure 19-10. Under the Bretton Woods System of exchange rates, if the par exchange rate was $2 per pound in the figure above, and equilibrium persisted at $3, then a revaluation of the currency would have
A) led to a balance of trade surplus. B) increased the price of imports to Britain. C) led to a current account surplus. D) increased the price of British exports to the United States.
If actual experience supports two competing theories, then both theories are proven to be true
Indicate whether the statement is true or false
Adam Smith is the father of modern economics
a. True b. False Indicate whether the statement is true or false