If the Actual Price Were Below the Equilibrium Price in the Market

question 78

Multiple Choice

If the actual price were below the equilibrium price in the market for bread, a:

• A) surplus would develop that cannot be eliminated over time.
• B) shortage would develop, which market forces would eliminate over time.
• C) surplus would develop, which market forces would eliminate over time.
• D) shortage would develop, which market forces would tend to exacerbate.

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Definitions:

Replacement Level

The replacement level is the number of children that each woman must have on average for population size to remain stable. Ignoring any inflow of population from other countries and any outflow to other countries, the replacement level is 2.1.

Total Fertility Rate

The average number of children born to a woman over her lifetime within a population.

Population Size

The total number of individuals within a defined area or group at a specific time.

Total Fertility Rate

The average number of children a woman is expected to give birth to during her lifetime, based on current birth rates.