Suppose ABC Corporation is willing to sell 100 shirts when the price is $10 and 200 shirts when the price is $15, but XYZ Inc is willing to sell 500 shirts when the price is $10 and 350 shirts when the price is $15. Which of the following statements about the two companies is correct?
A. ABC Corporation follows the law of supply, but XYZ Inc does not.
B. ABC Corporation does not follow the law of supply, but XYZ Inc does.
C. Both ABC Corporation and XYZ Inc follow the law of supply.
D. Neither ABC Corporation nor XYZ Inc follow the law of supply.
Answer: A
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The typical family on the Planet Econ consumes 10 pizzas, 7 pairs of jeans, and 20 gallons of milk. In 2008, pizzas cost $10 each, jeans cost $40 per pair, and milk cost $3 per gallon. In 2009, the price of pizzas went down to $8 each, while the prices of jeans and milk remained the same. Between 2008 and 2009, a typical family's cost of living:
A. remained the same. B. increased by 4.5 percent. C. decreased by 4.5 percent. D. decreased by 20 percent.
Using the data in the table above, if the price of a stapler is $5, then there is ________ of staplers, and the quantity of staplers demanded ________ the quantity of staplers supplied
A) a shortage; is greater than B) a surplus; is less than C) a shortage; is less than D) a surplus; is greater than E) neither a surplus nor a shortage; equals
Suppose that there are only two types of used cars, peaches and lemons. Peaches are worth $10,000 and lemons are worth $4,000. Without effective signals such as warranties, the owners of peaches cannot sell their cars for $10,000 because the
A) owners of peaches cannot convince buyers that their cars are worth $10,000. B) buyers cannot convince owners of peaches to sell their cars for $10,000. C) owners of lemons cannot convince buyers that their cars are worth more than $4,000. D) buyers cannot convince owners of lemons to sell their cars for $4,000.
Which of the following best characterizes the profit of a buyer of a futures contract?
A) spot price at settlement minus futures price at purchase B) futures price at settlement minus spot price at purchase C) futures price at purchase minus spot price at settlement D) spot price at purchase minus futures price at settlement