Refer to the above diagram of the market for corn. If the price in this market is at $2 per bushel, then there will be a:
Surplus and the price will tend to rise
Surplus and the price will tend to fall
Shortage and the price will tend to rise
Shortage and the price will tend to fall
Shortage and the price will tend to rise
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A correlation between two variables implies that:
A) there is a cause-effect relationship between the two variables. B) it is impossible to measure one variable without measuring the other. C) there is a mutual relationship between both the variables. D) when one variable changes, the other variable always changes by exactly the same amount.
In 2008, the liquidity of mortgage-backed securities declined significantly. Make use of a graph of the bond market to show how this affected the price of mortgage-backed securities
What will be an ideal response?
Refer to the graph shown. Suppose that the market price is $5. At this price, a perfectly competitive firm should:
A. continue to produce in the short run but shut down in the long run. B. shut down immediately. C. shut down in the short run but continue production in the long run. D. continue to produce in both the short run and the long run.
The additional revenue a firm obtains when it hires an additional worker (holding other inputs constant) is the
A) marginal revenue product (MRP) of labor. B) total factor cost (TFC) per worker. C) general rule for hiring. D) marginal physical product (MPP) of labor.