In a competitive market, if there should be a surplus of a product at a given price:
A) sellers will drive the price down.
B) sellers will drive the price up.
C) buyers will drive the price up.
D) the price will tend to remain constant.
Ans: A) sellers will drive the price down.
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A situation in which a market economy leads to too few or too many resources going to a particular economic activity is known as
A) competition. B) excessive competition. C) destructive competition. D) a market failure.
Which of the following is not an activity of the Fed?
a. Making loans to the public b. Clearing banks' checks c. Lending funds to the Federal government d. Purchasing U.S. government securities e. Holding deposits of the U.S. Treasury
To reach the socially optimal allocation of resources, the amount of government revenue received from a pollution tax should be
a. equal to the negative externality cost associated with producing the good b. less than the negative externality cost of producing the good c. greater than the negative externality cost of producing the good d. equal to the private cost of producing the good e. greater than the private cost of producing the good
Plato and Aristotle were both concerned about how an unequal distribution of income could cause political instability
Indicate whether the statement is true or false