Suppose that the price of wheat is above its equilibrium price. You would expect to see
A) a shortage on the market that causes prices to increase further.
B) an increase in quantity demanded because of the high price.
C) a leftward shift of the demand curve because of the high price.
D) sellers begin to lower their prices because of the surplus of wheat.
D
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Suppose eating soybeans leads to less cancer and heart disease. What effect would people eating more soybeans likely have on feed corn (a product also grown on land used to grow soybeans)?
A) The supply of feed corn will decrease. B) The cost of producing feed corn will increase. C) The price of feed corn will increase. D) All of the above.
Adverse selection is a problem associated with equity and debt contracts arising from
A) the lender's relative lack of information about the borrower's potential returns and risks of his investment activities. B) the lender's inability to legally require sufficient collateral to cover a 100% loss if the borrower defaults. C) the borrower's lack of incentive to seek a loan for highly risky investments. D) the lender's inability to restrict the borrower from changing his behavior once given a loan.
If an earthquake destroys most of a country's steel mills, then the country's supply curve of steel will shift to the left
Indicate whether the statement is true or false
If the U.S. dollar depreciates, in the long run the United States should experience a
A. Larger deficit in the U.S. current account. B. Lower inflation rate. C. Smaller deficit in the U.S. trade balance. D. Larger deficit in the U.S. capital account.