When a freely functioning market is in disequilibrium:
a. the government must set a price ceiling.
b. the government must set a price floor.
c. the price and quantities demanded and/or supplied change until equilibrium is established.
d. it will continue to remain in disequilibrium.
e. it will reach equilibrium at a very high/low price.
c
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Which of the following is not directly counted in GDP?
A) investment expenditures B) consumer goods C) government purchases D) intermediate goods
If the U.S. can produce pizza for $5 each and barrels of beer for $25 each, and Germany can produce pizza for $7 each and barrels of beer for $21 each, then Germany has
A) a comparative advantage in the production of beer. B) an absolute advantage in the production of beer. C) a comparative advantage in the production of pizza. D) a comparative advantage in the production of beer and pizza.