Suppose the price of a DVD is $15 per unit. At that price, consumers wish to purchase 6,000 units weekly and producers wish to sell 4,000 units weekly. In this situation,
a. unsatisfied consumers will bid up the market price.
b. the market price will fall because producers are unsatisfied.
c. the price will rise and the demand will fall to bring the market to equilibrium.
d. supply will increase by 2,000 units in order to satisfy consumers.
a. unsatisfied consumers will bid up the market price.
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When economists say that an interest rate is compounding, they imply that:
A) the rate of interest decreases every year. B) the rate of interest increases every year. C) interest is being earned on interest. D) double the interest payment is received every two years.
When a nation prints money (rather than taxing directly) to finance its government spending, it results in inflation, and purchasing power of the private sector falls. This is known as:
A) benchmarking. B) indirect taxation. C) seigniorage. D) creeping inflation.
If marginal revenue equals zero, then demand at this level of output is
A) perfectly inelastic. B) inelastic. C) unit elastic. D) elastic.
When we believe the best result will come from the decision we have made, we are being:
A. gullible. B. short-sighted. C. rational. D. considerate.