In a competitive market, when price is below the equilibrium price, there will be pressure for the price to:
A) fall.
B) stay the same.
C) rise.
D) change only if demand and/or supply change.
Ans: C) rise.
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To test the theory that if the price of pens rises, then pen purchases fall, an economist would
A. collect data on the price of pens and the price of pencils because the two goods are substitutes. B. investigate whether people purchase more pens when their income rises. C. analyze data on pen purchases linked to the price of pens, holding other factors constant. D. ask his or her friends if they would buy fewer pens when the price rises.
If the credits for a principles of economics section is three units and an instructor teaches two sections with 100 students in each and tuition and fees at your university are $100 per unit. If the instructor is paid $ 20,000 to teach both classes, should the university hire the instructor?
A. Yes, the MRP of the instructor is higher than the wage. B. Yes, the wage is higher than the instructor's MRP. C. Yes, the MRP of the instructor is lower than the wage. D. No, the wage is higher than the instructor's MRP.