When will a shortage occur in a market?
a. When the actual price is lower than the equilibrium price
b. When quantity supplied is greater than the equilibrium quantity
c. When the quantity that consumers are willing and able to purchase decreases
d. When the quantity available at zero price is insufficient to meet demand
e. When a price floor is set in the market
QUESTION 2When a particular resource is commonly used, it tends to get underutilized.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3The output level that occurs in any market that is in equilibrium:
a. is the quantity where the supply curve intersects the y-axis.
b. is the quantity where the demand curve intersects the x-axis.
c. is the quantity at an output level where buyers will pay more than suppliers require.
d. is an output level where buyers will not pay as much as suppliers require.
e. is the quantity where the demand and supply curves intersect each other.
QUESTION 4Production becomes more efficient if a common property is turned into a private property.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5Assume that Ford Motor Company engineers achieve a revolutionary technological breakthrough in the production process of automobiles. Which of the following is expected to take place?
a. A movement up along the existing supply curve for Ford automobiles
b. The supply of Ford automobiles will remain unchanged
c. An inward shift of the supply curve for Ford automobiles
d. A downward movement along an existing supply curve for Ford automobiles
e. An outward shift of the supply curve for Ford automobiles
QUESTION 6The government should subsidize the production of goods which generate a positive externality.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7The market supply curve for any product:
a. always depends on the market demand for that product.
b. depends on the general income level of the consumers in the market.
c. is a summation of individual firms' supply curves.
d. equals the total revenue generated through sale of the commodity.
e. is affected by the prices of related products.
QUESTION 8Private costs of an economic activity exceed social cost when external benefits are created.
a. True
b. False
Indicate whether the statement is true or false
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