Excess demand occurs when
a. the actual price is greater than the equilibrium price
b. equilibrium is undefined
c. consumer wants are unlimited
d. the actual price is less than the equilibrium price
e. the market is in equilibrium
D
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If devaluation improves only the BOP, rather than the BOT, this implies that the capital account must have improved following a devaluation
Indicate whether the statement is true or false
Real gross domestic product (GDP) increases if
a. current prices increase b. current quantities increase c. current prices are constant d. nominal GDP increases e. nominal GDP decreases
All of the following will cause the supply curve of good A to shift rightward EXCEPT
A. a reduction in the prices of inputs used to produce good A. B. a decrease in the per-unit tax on good A which producers must pay. C. an increase in the number of firms in the industry producing good A. D. an increase in the market price of good A.
Refer to the diagrams. The solid lines are production possibilities curves; the dashed lines are trading possibilities curves. The data suggest that:
A. West Lothian should specialize in, and export, beer.
B. both countries will be better off if they do not engage in specialization and trade involving
these two products.
C. West Lothian should specialize in, and export, pizza.
D. East Lothian should specialize in, and export, beer.