When quantity demanded is greater than quantity supplied, the resulting shortage causes the price to fall.

Refer to Figure 2-11. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of cotton?

A) They have the same advantage. B) Pakistan C) Indonesia D) cannot be determined

Refer to Figure 10-1. When the price of hoagies increases from $5.00 to $5.75, quantity demanded decreases from Q1 to Q0. This change in quantity demanded is due to

A) the fact that marginal willingness to pay falls. B) the law of diminishing marginal utility. C) the income and substitution effects. D) the price and output effects.