Which of the following is the correct way to describe equilibrium in a market?
A. At equilibrium, demand equals supply.
B. At equilibrium, quantity demanded equals quantity supplied.
C. At equilibrium, market forces are no longer at work.
D. Equilibrium is a tendency, a state of perpetual motion.
E. Equilibrium is the best combination of price and quantity.
Answer: B
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Refer to the graph shown.
A movement from A to B is most likely to be caused by ________.
A. a decrease in aggregate demand B. an increase in input prices C. a decrease in input prices D. an increase in aggregate demand
Cindy's attitudes towards risk are summarized by the utility function U(w) = . Cindy has an initial wealth of $100. There is a 10% chance that her home will sustain flood damage next year costing her $40 in repairs
What is the most she will pay to for a full $40 of flood insurance?
Refer to Table 3-40. Italy should specialize in the production of
a. boats and import cars b. cars and import boats c. both goods and imports neither good d. neither good and import both goods
Which of the following is not a characteristic of a perfectly competitive market?
A. There is a large number of small firms. B. Firms sell a homogeneous product. C. Firms can easily enter or exit the market. D. Firms are price makers, not price takers.