When the price of a good is below the equilibrium price,
A. suppliers are unable to sell as many units as they want; they will cut output and lower prices.
B. suppliers can sell as many units as they can produce; they will increase production and raise prices.
C. the demand curve shifts down to reach an equilibrium price.
D. the supply curve will shift up to reach an equilibrium price.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD 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. D; B C. A; B D. B; C
The government safety net creates ________ problem because risk-loving entrepreneurs might find banking an attractive industry
A) an adverse selection B) a moral hazard C) a lemons D) a revenue
The F-test is used in forecasting to
A) establish confidence intervals for testing regression coefficients. B) examine the degree of multicollinearity among independent variables. C) determine how well a regression equation can account for dependent variable values. D) determine whether an identification problem exists.
One problem facing public goods is the ________ ________ problem
a. rent seeking b. free-rider c. rational ignorance d. there are no problems with public goods