If Both Buyers and Sellers Expect the Price of a Commodity

question 13

Multiple Choice

If both buyers and sellers expect the price of a commodity to rise in the future, it is likely that the market clearing price ________ and the equilibrium quantity ________.

• A) will fall, cannot be predicted
• B) will rise, cannot be predicted
• C) cannot be predicted, will fall
• D) cannot be predicted, will rise

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Definitions:

Negligently

Acting in a careless or thoughtless manner, often resulting in harm or damage to others.

Indemnity

A security or protection against a financial liability or loss.

Disability Insurance

A type of insurance policy providing income in the event a worker is unable to perform their job due to disability.

Contract

A legally binding agreement between two or more parties that is enforceable by law.