Asset price "bubbles" occur when buyers expect asset prices to increase in the future.
Answer the following statement true (T) or false (F)
True
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If a surplus exists in a market, then we know that the actual price is
a. above the equilibrium price, and quantity supplied is greater than quantity demanded. b. above the equilibrium price, and quantity demanded is greater than quantity supplied. c. below the equilibrium price, and quantity demanded is greater than quantity supplied. d. below the equilibrium price, and quantity supplied is greater than quantity demanded.
A seller's reservation price is generally equal to:
A. the seller's opportunity cost of producing an additional unit. B. the buyer's reservation price. C. the seller's marginal benefit from producing an additional unit. D. the market price.
Pure competition produces a socially optimal allocation of resources in the long run because:
A. Marginal cost equals marginal revenue B. Marginal cost equals average total cost C. Marginal revenue equals price D. Marginal cost equals price
Italy should specialize in the production of
A. neither good and import both goods. B. cars and import boats. C. both goods and import neither good. D. boats and import cars.