A shortage occurs in a market when:
A) supply exceeds demand.
B) price is lower than the equilibrium price.
C) price is higher than the equilibrium price.
D) the marginal utility of consumption is negligible.
B
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The figure above shows the market for college education in the United States. If the government has a goal of enrolling the efficient number of students each year, the government should provide a voucher to students equaling ________
A) $16,000 B) $13,000 C) $11,000 D) $5,000 E) $7,000
Which of the following illustrates adverse selection?
a. Individuals sometimes mistakenly buy defective cameras. b. Individuals will not search for bargains for low cost items. c. Individuals know a lot about their family health history when they buy insurance. d. Individuals can choose whether to drive safely or not.
An exchange rate that varies according to supply and demand for the currency in the foreign exchange market is called a ________ exchange rate.
A. flexible B. nominal C. fixed D. real
Refer to Table 10.1. Suppose that this year the wage rate is $30 and the price of the good is $1. If the firm is maximizing profit, ________ workers will be hired. Next year the wage rate will increase to $40, but the price of the good will remain at $1. Then ________ workers will be hired.
A. 6; 5 B. 6; 6 C. 7; 6 D. 5; 5