Answer the following statements true (T) or false (F)
1. If the newspapers report that there is a shortage of strawberries, it must mean that the current price of strawberries is below the equilibrium price.
2. If there is a surplus in a market, competition among the sellers will drive price down.
3. If we observe that the price of gold is rising and the quantity of gold traded in the market is falling, then this must be the result of an increase in the supply of gold.
4. When the government requires ethanol from corn to be used as an additive to gasoline, the supply of corn decreases.
1. TRUE
2. TRUE
3. FALSE
4. FALSE
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Refer to the table above. In autarky the relative price of X (in terms of Y) in A would be
A) 3/4. B) 4/3. C) 3/9. D) $3.
John is able to take out a loan for $1,000 for one year at an annual interest rate of 10 percent. After calculating his return to be $200, John will:
A. make money on net, and should take out the loan. B. not make money on net, and should not take out the loan. C. not make money on net, and should take out the loan. D. make money on net, and should not take out the loan.