Use the following graph of the market for milk to answer the question below.
In this market, the equilibrium price is ________ and equilibrium quantity is ________.
A. $28 per gallon; 150 million gallons
B. $1.50 per gallon; 30 million gallons
C. $1.50 per gallon; 28 million gallons
D. $1.00 per gallon; 35 million gallons
Answer: C
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If a household’s income declines, then its budget line is
A. unaffected. B. going to be steeper. C. shift parallel, closer to the origin. D. shift parallel, further away from the origin. E. become more concave toward the origin.
A small open economy has a current account balance of zero. A rise in the world real interest rate causes
A) a current account surplus. B) a financial account surplus. C) net borrowing from abroad. D) absorption to exceed income.
Consumer surplus is
A. a measure of the gains from trade to consumers. B. the result of a surplus. C. the result of a shortage. D. a measure of the quantity traded by consumers.
Relating to the Economics in Practice on page 357: Huntington's disease is an inheritable disorder which affects 1 in 10,000 individuals, and since 1993 there has been a test that perfectly predicts the disease. Presently, insurance companies are not legally allowed to inquire about the results of genetic tests. This has led to ________ favoring potential insurance buyers.
A. asymmetric information B. adverse selection C. market signaling D. moral hazard