Assume there is a shortage in the market for digital music players. Which of the following statements correctly describes this situation?
A) The shortage will cause a decrease in the equilibrium price of digital music players.
B) The demand for digital music players is greater than the supply of digital music players.
C) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price.
D) The price of digital music players will rise in response to the shortage; as the price rises the quantity demanded will increase and the quantity supplied will decrease.
C
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In the competitive market for balloon rides, marginal social cost equals marginal social benefit when 3,000 balloon rides a day are taken and the price of a ride is $130. Which of the following statements is TRUE?
A) There is a free-rider problem. B) Too many rides are available. C) Too few rides are available and the price of a balloon ride is too high. D) The efficient quantity of balloon rides is 3,000 a day.
What is "market signaling"?
What will be an ideal response?
According to international data,
a. U.S. per capita consumption of water is lower than in most other countries b. water prices are generally equivalent across nations c. European cities generally pay higher prices for water than cities in the United States d. water prices across nations tend to defy the Law of Demand
Figure 14-8
Refer to . At an interest rate of 4 percent there is excess
a.
money demand equal to the distance between a and b.
b.
money demand equal to the distance between b and c.
c.
money supply equal to the distance between b and a.
d.
money supply equal to the distance between c and b.