Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price, a
A) shortage exists and the price falls to restore equilibrium.
B) shortage exists and the price rises to restore equilibrium.
C) surplus exists and the price falls to restore equilibrium.
D) surplus exists and the price rises to restore equilibrium.
E) surplus exists but nothing happens until either the demand or the supply changes.
C
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If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good
a. True b. False Indicate whether the statement is true or false
Marni’s country is rich in timber and has large sawmills. Carlos’s country has little land, but the government has invested heavily in education and technology. The principle of comparative advantage means that ______.
a. Marni’s country will grow faster than Carlos’s because it has more natural resources b. both countries will benefit if they each specialize production based on their resources and trade with each other c. Carlos’s country will have a higher economic growth rate than Marni’s d. these countries operate on different economic tracks and cannot be directly compared
When demand is elastic, an increase in price will cause
a. an increase in total revenue.
b. a decrease in total revenue.
c. no change in total revenue but an increase in quantity demanded.
d. no change in total revenue but a decrease in quantity demanded.
Refer to the graph shown. The purchase of shekels by tourists who enter the country would shift the:
A. demand curve to the right and raise the price of shekels. B. supply curve to the right and reduce the price of shekels. C. demand curve to the left and reduce the price of shekels. D. supply curve to the left and raise the price of shekels.