What is the market fundamentals price and how might it differ from the equilibrium price?
What will be an ideal response?
The market fundamentals price is the price determined by the fundamental determinant of demand, the value of marginal product, and the fundamental determinant of supply, the marginal cost of extraction. When people's expectations of the price differ from the market fundamentals price, then the demand and supply are affected by the expected price. At this point the equilibrium price, determined in part by people's expectations, differs from the market fundamentals price.
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
The following is not an example of risk aversion
a. you lock your garage when you have expensive workshop tools b. you are more careful when you buy a more expensive car c. Individuals tend to gamble more with their money when the future is certain d. you only go swimming when the lifeguard is not on duty
Which of the following is the definition of wealth?
a. Real disposable income b. The total value of assets c. Real income d. The value of liabilities minus the value of assets e. The value of assets minus the value of outstanding liabilities
Please refer to the following diagram. 
If the supply curve is S, at a price of $4 there will be a
A. shortage of 2. B. surplus of 2. C. surplus of 1. D. shortage of 1.