How do future expectations about the price of a good affect the present supply?
(A) If the price is expected to decrease, many producers will hold onto their supply.
(B) If the price of a related good is expected to increase, only a few sellers will hold onto their supply until the increase occurs.
(C) If the price is expected to increase, many producers will hold onto their supply.
(D) If the price is expected to increase and then decrease, most sellers will hold onto their supply until the decrease has occurred.
Ans: (C) If the price is expected to increase, many producers will hold onto their supply.
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In international finance, hedging indicates:
a. not being able to make a commitment to buy or sell. b. delaying a purchase of foreign exchange, hoping the price will fall. c. simultaneously buying several currencies to ensure that at least one will rise in value. d. avoiding risk of loss by offsetting an obligation to buy a foreign currency by locking in a contract to sell it at the same time.
In the above figure, Mark's monthly budget line for movies and plays changed, as shown by the arrow. The change was caused by
A) a decrease in Mark's income. B) an increase in Mark's income. C) a fall in the price of a play. D) a rise in the price of a play.