Refer to Figure 3-6. The figure above represents the market for coffee grinders. Assume that the market price is $21. Which of the following statement is true?
A) There will be a shortage that will cause the price to increase; demand will then decrease and supply will increase until the price equals $25.
B) There is a shortage that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25.
C) There is a shortage that will cause the price to increase; quantity supplied will then decrease and quantity demanded will increase until the price equals $25.
D) There is a shortage that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.
B
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Refer to the scenario above. Which of the following will be true if Harry is known to be trustworthy?
A) The outcome will be a Nash equilibrium. B) The equilibrium outcome will be socially inefficient. C) Unique equilibrium will not occur. D) Multiple equilibria will occur.
When net capital flows are negative,
A) capital inflows are less than capital outflows. B) net foreign investment is negative. C) capital outflows are less than capital inflows. D) A and B are both correct.