exam set 4

If prices are held below the equilibrium price

there exists a shortage in the market.
After the demand curve shifts to D2 , if the price is held below the new equilibrium, then:

the quantity demanded will be greater than the quantity supplied.
Which of the following statements is true?

Price controls weaken the functioning of the invisible hand.
which of the following statements differentiates between a shortage and a surplus?

A shortage occurs when quantity demanded exceeds quantity supplied, whereas a surplus occurs when quantity supplied exceeds quantity demanded
Reservation value of a buyer reflects her ________.

willingness to pay for a good or service
In a perfectly competitive market, if the market price is lower than the average total cost of production:

existing firms will leave the market.
If prices are held below the equilibrium price:

there exists a shortage in the market.

Author

dwrght16

329524

Card Set

exam set 4

Description

midterm

Updated

2017-03-14T18:04:45Z

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