Refer to the above figure. What price-output combination would apply under perfect competition?
A. P4 and Q1
B. P1 and Q1
C. P2 and Q3
D. P3 and Q2
Answer: D
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Refer to Table 3-6. The table contains information about the sorghum market. Use the table to answer the following questions
a. What are the equilibrium price and quantity of sorghum? b. Suppose the prevailing price is $6 per bushel. Is there a shortage or a surplus in the market? c. What is the quantity of the shortage or surplus? d. How many bushels will be sold if the market price is $6 per bushel? e. If the market price is $6 per bushel, what must happen to restore equilibrium in the market? f. At what price will suppliers be able to sell 36,000 bushels of sorghum? g. Suppose the market price is $14 per bushel. Is there a shortage or a surplus in the market? h. What is the quantity of the shortage or surplus? i. How many bushels will be sold if the market price is $14 per bushel? j. If the market price is $14 per bushel, what must happen to restore equilibrium in the market?
Define and illustrate a principal-agent problem
Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation from 4 percent to 2 percent?
Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary