The number of persons who could become lawyers or surgeons is potentially quite large, yet these two groups earn fairly high incomes. One of the main reasons why they do is the
A. return on the investment of many years of training.
B. evening-out of their low income during schooling.
C. rent on their unique and rare talents.
D. scarcity value of their abilities.
Answer: A
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Suppose that the U.S. exchange rate is expected to fall in the future. As a result, in the foreign exchange market, there will be
A) an increase in the demand for dollars, a decrease in the supply of dollars, and a rise in the equilibrium exchange rate. B) an increase in the demand for dollars, a decrease in the supply of dollars, and a fall in the equilibrium exchange rate. C) a decrease in the demand for dollars, an increase in the supply of dollars, and a rise in the equilibrium exchange rate. D) a decrease in the demand for dollars, an increase in the supply of dollars, and a fall in the equilibrium exchange rate.
The demand and supply equations for the peach market are:
Demand: P = 24 - 0.5Q Supply: P = -6 + 2.5Q where P = price per bushel, and Q = quantity (in thousands). a. Calculate the equilibrium price and quantity. b. Suppose the government guaranteed producers a price of $24 per bushel. What would be the effect on quantity supplied? Provide a numerical value. c. By how much would the $24 price change the quantity of peaches demanded? Provide a numerical value. d. Would there be a shortage or surplus of peaches? e. What is the size of this shortage or surplus? Provide a numerical value.