Which of the following would cause both the equilibrium price and equilibrium quantity of cookies to decrease?
a. a rise in the price of milk (a complement)
b. a rise in consumer incomes
c. a rise in the price of cookie dough
d. a drop in the price of cookie dough
e. a rise in the price of crackers (a substitute)
A
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Which statement best describes the relationship between scarcity and shortage?
A) Neither scarcity nor shortages will exist if money prices are allowed to determine who gets what. B) Scarcity and shortages are unavoidable as long as money prices are allowed to determine who gets what. C) Scarcity is an inescapable fact of life but shortages are avoidable. D) Shortages are an inescapable fact of life but scarcity can be eliminated.
The annual volume of foreign exchange transactions:
A. is more than 18 times larger than world GDP. B. is one-eighth the world GDP. C. is three times the world trade volume. D. is small relative to most financial markets.