A shortage exists in the market for corn at the prevailing price. The shortage will be eliminated by a price:
a. increase, increasing the supply and decreasing the demand
b. decrease, increasing the supply and decreasing the demand.
c. decrease, increasing the quantity supplied and decreasing the quantity demanded.
d. increase, increasing the quantity supplied and decreasing the quantity demanded.
d
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Refer to Figure 4.6, which shows David's and Celeste's individual supply curves for flower arrangements per week. Assuming David and Celeste are the only producers in the market, if the market quantity supplied is 350, the price must be
A) $10. B) $20. C) $30. D) $40.
Which of the following assets is the least liquid?
A) money market mutual fund B) stock C) treasury bond D) house
Early developers within a given industry benefit from economies of scale, in that they are able to
a. produce larger volumes at a lower cost. b. shape the product based on what the consumer wants. c. avoid competition by creating a monopoly. d. start big instead of having to start small.
Suppose that for Emily, DVDs and trips to the movie theater are perfect substitutes. Currently, Emily is spending all of her income on trips to the movie theater. If the price of DVDs doubles, the substitution effect will
a. be two times the income effect. b. be half the income effect. c. be zero. d. always increase the number of trips to the movie theater Emily makes.