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Which is not true of market equilibrium All sellers who want to sell at the equilibrium price can find a buyer to sell to The highest possible

Which is not true of market equilibrium? 

A. All sellers who want to sell at the equilibrium price can find a buyer to sell to

B. The highest possible welfare is achieved even if many externalities exist

C. All buyers who want to buy at the equilibrium price can find a seller to buy from

D. Circumstances can change from day to day which make any equilibrium very tentative

2.The law of demand states that:  

A. scarcity can never be solved

B. when the price of a product falls, people buy more of it

C. supply creates its own demand

D. prices will continue to rise as long as the population grows

3.The real price of a product is:  

A. its absolute level on any given day

B. its absolute level on any given day divided by the relevant price index

C. its absolute level on any given day minus any external costs of the production of the good

D. its price relative to the price of other goods and services

4.The equilibrium price is the price:  

A. from which there is always a tendency to move away

B. at which quantity supplied equals quantity demanded

C. where there are surpluses and shortages

D. suppliers agree to charge

5.If the demand curve is P = 6 - Q and the supply curve is Q, the equilibrium price is:  

A. 4

B. 3

C. 2

D. 0

6.If the demand curve is P = 6 - Q and the supply curve is Q. At at a price of €4 there will be an:  

A. excess supply of 1

B. excess supply of 2

C. excess demand of 1

D. excess demand of 2

7.A horizontal interpretation of the demand curve for a product:  

A. stipulates price as the independent variable in the price quantity relationship

B. tells what prices would be required to sell various quantities of output

C. indicates that a seller can sell all he/she wants to sell at the given price

D. indicates that a buyer can buy all she/he wants to buy at a given price

8.If the demand curve is P = 6 - Q and the supply curve is Q. At a price of €2 there will be an:  

A. excess supply of 1

B. excess supply of 2

C. excess demand of 1

D. excess demand of 2

9.If the government decides to set the price of widgets below the equilibrium price:  

A. most economists would argue that one could reallocate resources and improve total welfare in the system

B. people who buy the widgets are now worse off

C. producers of widgets are now better off

D. the market quantity of widgets will increase

10.If an airline overbooks it pays people who volunteer to leave the overbooked flight. This system is better than drawing randomly from a hat the people who should miss the flight because:  

A. those with the least to lose are the ones who miss the flight

B. it gives everyone a chance to get money they hadn't counted on

C. it is quicker and helps keep the flight on schedule

D. it is the most equitable way of solving the situation

Feb 11 2020 View more View Less

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