If the price in the market for a commodity is below the equilibrium price, the:
A) price will remain unchanged.
B) price will decline to clear the market.
C) quantity supplied exceeds the quantity demanded.
D) quantity demanded exceeds the quantity supplied.
Ans: D) quantity demanded exceeds the quantity supplied.
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One policy the government can use to remedy the effects of pollution caused by the production of a good is to
a. lower the price of the good b. create positive externalities to compensate for the negative ones c. levy a tax on each unit of the good produced d. create free riders e. increase the production of the polluting good
In the short run, firms earning a profit will want to ________ their profits while firms suffering losses will want to ________ their losses.
A. maximize; minimize B. minimize; maximize C. maximize; maximize D. minimize; minimize