Which of the following statements about equilibrium is true?
a. The positive and the normative attributes of equilibrium are similar.
b. The equilibrium price fails to redistribute goods in accordance to individual valuations.
c. Equilibrium refers to a state of complete happiness or fairness.
d. In equilibrium there are neither surpluses nor shortages.
D
You might also like to view...
The following appeared in a Florida newspaper a week after a hurricane hit the state. "Floridians are relieved that the storm produced no fatalities but homeowners face weeks, if not months, of rebuilding. Matters are made worse by the soaring prices of plywood and other building materials that always follow in a hurricane's path. Complaints of profiteering and price gouging have not deterred firms from raising their prices by over 100 percent." Which of the following offers the best explanation for the price increases referred to in the article?
A) The hurricane caused an increase in the demand for building materials. B) The hurricane created an artificial shortage of building materials. C) There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm. D) The hurricane reduced the number of suppliers of building materials.
(Consider This) Brinley is the hottest new pop singer, but his agent discovers that Internet sales of Brinley's music have been poor due to Internet piracy, but concerts are regularly sold out and merchandise (such as T-shirts) sells well. If Brinley
wants to enhance profits, economists would most likely recommend that he: A. charge more for downloads, concerts, and merchandise. B. cut prices for downloads, concerts, and merchandise. C. only give concerts. D. keep prices of downloads low and raise prices for concerts and merchandise.