If a price is below equilibrium,
A. A surplus will cause the price to fall and the quantity supplied to decrease.
B. A shortage will cause the price to rise and the quantity supplied to increase.
C. A shortage will cause the price to fall and the quantity supplied to decrease.
D. A surplus will cause the price to fall and the quantity supplied to increase.
Answer: B
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The cost of unemployment to society includes the loss of the goods and services that might have been produced if the unemployed had been employed
a. True b. False Indicate whether the statement is true or false
Suppose a consumer consumes two goods, X and Y. The relative price of the two goods equals the
a. marginal rate of substitution. b. rate at which the consumer will give up X to gain Y while maintaining the same level of utility. c. slope of the budget constraint. d. All of the above are correct.
Moral hazard
A. occurs when managers pursue profit maximization without regard to the interests of society in general. B. is the cause of principal-agent problems. C. occurs only rarely in modern corporations. D. exists when either party to a contract has an incentive to cancel the contract.
Suppose that in Belize, the opportunity cost of producing a sailboat is 5 hang gliders. In Honduras, the opportunity cost of producing a sailboat is 8 hang gliders
a. What is the opportunity cost of producing a hang glider for Belize? b. What is the opportunity cost of producing a hang glider for Honduras? c. Which country has a comparative advantage in the production of hang gliders? d. Which country has a comparative advantage in the production of sailboats?