Refer to the information provided in Figure 4.3 below to answer the question(s) that follow.
Figure 4.3Refer to Figure 4.3. At an effective price ceiling for pencils,
A. price is above equilibrium.
B. quantity demanded is equal to quantity supplied.
C. quantity demanded is greater than quantity supplied.
D. quantity demanded is less than quantity supplied.
Answer: C
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Suppose a seller's opportunity cost matches a buyer's valuation of the product. Assuming a two-person economy, which of the following statements will be true?
a. The transaction will benefit the buyer, while the seller will neither gain nor lose from it. b. The economic value created by this exchange will be zero. c. Both parties will be worse-off after the transaction. d. The seller will be worse-off than the buyer after the transaction.
If marginal cost exceeds marginal revenue,
a. the firm can increase profits by increasing output b. the firm will lower profits by increasing output c. the firm is maximizing profits d. total cost exceeds total revenue e. average cost equals average revenue
Which of the following events would be consistent with purchasing-power parity?
a. The price level in the United States rises more rapidly than that in Ireland and the real exchange rate defined as Irish goods per unit of U.S. goods stays the same. b. The money supply in the United States rises more rapidly than in Egypt and the nominal exchange rate defined as Egyptian pounds per dollar falls. c. Earl, a worldwide traveler, looks at exchange rates and worldwide breakfast prices one morning and finds that whatever country he decides to go to he can convert $15 into enough local currency to buy the same breakfast. d. All of the above are correct.
For a given seller, the accompanying figure shows the relationship between the number of units produced and the opportunity cost of producing an additional unit of output. If the market price of this good is $6, how many units would this seller produce?
A. 300 B. 250 C. 50 D. 150