Consider the Market for a Good That Is Initially in Equilibrium.Which

question 62

Multiple Choice

Consider the market for a good that is initially in equilibrium.Which of the following is most likely to happen if supply increases by a smaller amount than the increase in demand?

• A)Equilibrium price will fall and equilibrium quantity will rise.
• B)Equilibrium price will rise and equilibrium quantity will fall.
• C)Both equilibrium price and equilibrium quantity will rise.
• D)Equilibrium price will rise but the change in equilibrium quantity is indeterminate.
• E)Both equilibrium price and equilibrium quantity will fall.

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Definitions:

Migration

The movement of people from one area to another, often across borders or within a country, for the purpose of settling, work, or seeking better living conditions.

Trade Restrictions

Measures imposed by governments to control the amount and types of goods and services traded across borders, such as tariffs, quotas, and embargoes.

Tariffs And Quotas

Government-imposed trade restrictions; tariffs are taxes on imported goods, while quotas limit the quantity that can be imported.

Primary Products

Basic goods that are in or close to their natural state, which are usually used as raw materials for further production, like agricultural products, minerals, and forestry products.