When there is a shortage
I. there is a tendency for price to increase.
II. there is an excess quantity demanded
A) I only
B) II only
C) both I and II
D) neither I nor II
Answer: C
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The cross-price elasticity of demand measures how sensitive purchases of a specific product are to changes in
A. the price of that same product. B. the price of some other product. C. the general price level. D. income.
Why is a futures contract considered valuable by both producers and consumers?
A production possibilities curve indicates the
A. Maximum combinations of goods and services an economy can produce given its available resources and technology. B. Average combinations of goods and services an economy can produce given its available resources and technology. C. Maximum combinations of goods and services an economy can produce given unlimited resources. D. Combinations of goods and services an economy is actually producing.
Refer to the figure that shows the market for U.S. health care. Other things equal, which of the following would shift the demand curve for medical care from D 2 to D 1 ?
A. An aging population.
B. Loss of medical insurance benefits by part-time workers and early retirees.
C. Expansion of the Medicaid program.
D. Higher medical malpractice premiums.