When is a market at equilibrium?
A. when quantity demanded equals quantity supplied
B. when suppliers begin to reduce prices
C. when unsold goods begin to pile up
D. when prices equal the cost of production
Ans: A. when quantity demanded equals quantity supplied
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Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Mia's opportunity cost of producing one bandana is
A) 1/3 of a hair pin. B) 2.5 hair pins. C) 3 hair pins. D) 9 hair pins.
A technological improvement lowers the cost of producing coffee. At the same time, consumers' preferences for coffee increase. The equilibrium price of coffee will
A) rise. B) fall. C) remain the same. D) rise, fall, or stay the same, depending on the relative size of the shifts in the demand and supply curves.