a. will grow at a slower rate than country B b. is more efficient than country B
ID: 1141681 • Letter: A
Question
a. will grow at a slower rate than country B b. is more efficient than country B c. is producing more capital goods than country B d. will grow at a faster rate than country B. 18. A shortage of product means a(n): a. excess supply of the product. b situation where the current market price is too high. c. situation where the quantity demanded is less than the quantity supplied. d. excess demand of the product. 19. How will an increase in lumber prices influence the home construction market? a. The demand for newly constructed homes will increase. b. The supply of newly constructed homes will increase. c. The demand for newly constructed homes will decrease. d. The supply of newly constructed homes will decrease. Eshibi 315 Sapply and demand curves for good 2.00 Price150 So 0 100 200 300 40 20. In Exhibit 3-15, if the market price of good X is initially $.50, a movement toward equilibrium requires: a. no change, because an equilibrium already exists. b. the price to remain the same, but the supply curve to shift to the left. c. the price to fall below $.50 and both the quantity supplied and the quantity demanded to rise. d. the price to rise above $.50, the quantity supplied to rise, and the quantity demanded to fall.Explanation / Answer
18) (d) A shortage of product means excess demand of the product. It happens when the market price is lower than the equilibrium price which results in demand exceeding the supply.
19) (d) Lumber is used an input in home construction and in increase in lumber price will result in decline home suppliers profit. Hence an increase in lumber price will result in the fall in supply of newly constructed homes.
20) The equilibrium price is $1 and the current market price is $0.50 and at this price demand is greater than suppply. So a movement towards equilibrium requires the price to rise above $0.50, quantity demanded to fall and quantity suppplied to increase.
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