Refer to the above diagram, which shows demand and supply conditions in the competitive market for product X. If supply is S1 and demand D0, then
A. 0F represents a price that would result in a surplus of AC.
B. a surplus of GH would occur.
C. 0F represents a price that would result in a shortage of AC.
D. at any price above 0G a shortage would occur.
Answer: C
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a. The word economy comes from the Greek word for "rational thinker.". b. Economists study the management of scarce resources. c. Because economists believe that people pursue their best interests, they are not interested in how people interact. d. All of the above are correct.
In an open economy, a society's consumption possibilities are typically ________ its production possibilities.
A. equal to B. less than C. unrelated to D. greater than
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