Price Signals
What will be an ideal response?
- High Price = sell more, buy less
- Low Price = sell less, buy more
*goods & services for firms
*factors of production for households
- Prices play a role in markets to help deal with shortages and surpluses
You might also like to view...
Consumer’s surplus exists only for the last unit of a good that a buyer has purchased.
Answer the following statement true (T) or false (F)
What is the primary source for capital available to businesses? Name four methods of channeling these funds
What will be an ideal response?
When a consumer's willingness to buy a good or service is influenced by the number of people who have purchased that good or service, this is called
A) a switching cost. B) an opportunity cost. C) a network effect. D) an advertising gimmick.
Which of the following statements about the effects of rent control is correct?
a. The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments. b. The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments. c. In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments. d. The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly.