A market for a product reaches equilibrium when:
A. The actual quantity bought by buyers equals actual quantity sold by sellers
B. The price rises further after there is a surplus
C. Buyers intend to buy a quantity equal to the quantity that sellers intend to sell
D. Price falls further after there is a shortage
Answer: C
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In the last few decades there has been little progress in lowering the barriers to international trade
Indicate whether the statement is true or false
Suppose that IS and LM intersect at full-employment output. A rightward shift of IS will be followed by a __________ price level that shifts LM to the __________ in a return to full-employment
A) rising; right B) rising; left C) falling; right D) falling; left
If the interest rate increases, the money demand curve
a. shifts to the right. b. shifts to the left. c. neither shifts nor changes slope. d. gets steeper. e. becomes horizontal.
Assume that cotton is a normal good. Which of the following would cause both the equilibrium price and equilibrium quantity of cotton to increase?
A) an increase in consumer income B) a drought that sharply reduces cotton output C) a decrease in consumer income D) unusually good weather that results in a bumper crop of cotton