In the figure above, if the price is $8 a unit, is there a shortage or surplus and what is the amount of any shortage or surplus? What is the equilibrium price and quantity?
What will be an ideal response?
At a price of $8 there is a surplus because the quantity supplied exceeds the quantity demanded. The amount of the surplus is 4 units per month. The equilibrium price is $4 a unit and the equilibrium quantity is 3 units per month.
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At a given real exchange rate, which of the following, by itself, would increase the supply of dollars in the market for foreign-currency exchange?
a. foreign citizens want to buy more U.S. bonds b. U.S. citizens want to buy more foreign bonds c. foreign citizens want to buy more U.S. goods d. U.S. citizens want to buy more foreign goods
Which one of the following statements about water pricing in the United States is true?
a. As most water utilities are monopolies, they tend to make excessive profits b. Water prices are normally set according to the average cost of providing water c. Water prices are normally set according to the marginal water cost of providing water d. Water prices are normally set according to the interaction of supply and demand e. Water prices fluctuate significantly based on changes in seasonal demands
John is an employee at a car manufacturer. Today he has come into work to find that production has stopped because the government has determined that the steel used in the cars will be better used in the manufacture of a new railway line. John doesn't mind, because although his wages are low, he gets paid whether there is any work for him to do or not. John MOST likely lives in a ________.
A) traditional economy B) planned economy C) market economy D) mixed economy E) capitalist economy
In the short run, a decrease in aggregate demand will decrease:
A. the price level and have no effect on real domestic output. B. both real output and the price level. C. the price level and increase the real domestic output. D. the real domestic output and have no effect on the price level.