Suppose supply decreases, but there is no change in demand. As the market reaches its new equilibrium:
A. excess demand will lead the price to fall.
B. excess supply will lead the price to rise.
C. excess supply will lead the price to fall.
D. excess demand will lead the price to rise.
Answer: D
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One difference between perfectly competitive markets and single-price monopoly markets is that
A) marginal revenue equals marginal cost for perfectly competitive firms, but not for monopolists. B) marginal revenue equals price for perfectly competitive firms, but not for single-price monopolists. C) marginal cost equals average variable cost for perfectly competitive firms but not for monopolists. D) All the above answers are correct.
Economics is the study of
a. how the human race differs from other species b. how individuals amass personal fortunes in the stock market c. how individuals and nations deal with the problem of scarcity d. role that money plays in the economy e. how goods and services are distributed throughout the world