Refer to the above diagram. A price of $60 in this market will result in:
A. a shortage of 50 units.
B. a surplus of 50 units.
C. equilibrium.
D. a surplus of 100 units.
Answer: D
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Which of the following is a problem with the price system that can lead to fluctuations in output?
A) The price system works silently in the background. B) Prices may be flexible. C) Prices can be slow to adjust. D) all of the above
When economists address the concept of price and wage stickiness in relation to the business cycle, they are referring to
A) nominal prices and nominal wages. B) real prices and real wages. C) both nominal and real prices and wages. D) both nominal and real prices, but only real wages.
Assume that the farmers know that their revenues would increase if each would take a certain amount of acreage out of production. An agreement to do so
A) would not be made because the farmers have no incentive to enter into it. B) would not be made because it would contradict the assumption that farmers are profit maximizers. C) probably would not be adhered to, if made, because it would be disadvantageous for the farmers as a group. D) probably would not last, if made, because each farmer would have an incentive to break it.
A discouraged worker is
What will be an ideal response?