Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced.
B. overallocation of resources.
C. an impossible production point.
D. technological advancement.
Answer: A
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Which of the following would cause both the equilibrium price and equilibrium quantity of barley (assume that barley is an inferior good) to increase?
A) a drought that sharply reduces barley output B) an increase in consumer income C) a decrease in consumer income D) unusually good weather that results in a bumper crop of barley
What is the main problem with using physical units, instead of dollars, as the measure of total economic activity?
a. Other countries do not use units of measurement. b. Units of measurement are more difficult to calculate than dollars. c. Physical units of measurement change from year to year. d. Different products have different units of measurement.
Price ceilings which lead to shortages will impose costs on society because they
A. will lead to long waiting lines B. may result in black market prices, which are higher than the market-determined price would be. C. lead to a smaller quantity offered on the market. D. do all of the above.
One can say with certainty that equilibrium price will decline when supply:
A. and demand both decrease. B. increases and demand decreases. C. decreases and demand increases. D. and demand both increase.