What situation gives rise to a surplus?
A) The market clearing price of the good is too high.
B) The current price of the good is below its market clearing price.
C) The current price of the good is above its market clearing price.
D) Supply of the good decreases, but the market price is not permitted to change.
Answer: C
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The marginal propensity to consume (MPC)
A) shows the percentage of real disposable income consumed at each level of income. B) shows how much of an extra dollar of real disposable income is spent. C) shows how much real disposable income changes when consumption falls. D) is greater than 1 only if the marginal propensity to save is greater than 1.
A leftward shift of the supply curve will lead to a(n)
A) increase in equilibrium price. B) excess demand at the old equilibrium price. C) decrease in quantity demanded. D) All of the above.
Aggregate demand does not include: a. Purchases of intermediate goods and final goods
b. Purchases of used goods and services. c. Purchases of stocks and bonds. d. Aggregate demand does not include any of the above.
Refer to the accompanying figure. For Chris, the opportunity cost of removing one bag of trash is planting:
A. 3 bulbs. B. 25 bulbs. C. 1/3 of a bulb. D. 1/25 of a bulb.