If the price is above the equilibrium price, then there is a
A) surplus, and market forces will operate to lower price.
B) surplus, and market forces will operate to raise price.
C) shortage, and market forces will operate to lower price.
D) shortage, and market forces will operate to raise price.
A
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At any quantity of output below the intersection of the marginal revenue and marginal cost curves:
A. MR is higher than MC. B. MC is higher than MR. C. ATC is lower than AVC. D. the firm would lose profits producing the units.
Economists have been interested in the following interaction: A person is allowed to split a sum of money between himself and another person. The other person can then accept the split or reject it, in which case neither person gets anything. Economists call this interaction the:
A. prisoner's dilemma. B. sucker's payoff. C. ultimatum game. D. game of chicken.
If the economy were producing at point Z and moved to point D,
A. it could only produce more butter at the sacrifice of some gun production.
B. it could only produce more guns at the sacrifice of some butter production.
C. it could produce more guns and more butter at the same time.
D. it would be impossible to produce more guns without the sacrifice of some butter production.
Answer the following statements true (T) or false (F)
1. In the market for sushi, an increase in supply and a greater decrease in demand will cause both the equilibrium price and quantity to decrease. 2. In the market for sushi, an increase in the price of fish along with an increase in the popularity of sushi among consumers will cause the equilibrium quantity to increase, but the effect on the equilibrium price is indeterminate. 3. In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase. 4. In the market for crude oil, if the change in demand due to falling price of natural gas (a substitute for oil) is greater than the change in supply due to disruptions in oil-well operations in the Middle East, then the equilibrium price of oil will decrease. 5. In the foreign exchange market, if Canadian companies import more products from the U.S., then the demand for Canadian dollars will increase.