In competitive markets, a surplus or shortage will
A. cause changes in the quantities demanded and supplied that tend to intensify the surplus or shortage.
B. cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage.
C. cause shifts in the demand and supply curves that tend to eliminate the surplus or shortage.
D. never exist because the markets are always at equilibrium.
Answer: B
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If you have a choice of consuming either two apples, three oranges, or one candy bar, the opportunity cost of the candy bar is:
a. two apples. b. three oranges. c. two apples and three oranges. d. two apples or three oranges, whichever you value more. e. the difference in the prices of the three options.
The more elastic the supply of a product, the more likely that the actual benefit of a subsidy granted of the product will
a. go to sellers. b. go to buyers. c. go equally to both buyers and sellers. d. do none of the above.