The Market System Automatically Corrects a Surplus Condition in a Competitive

question 32

Multiple Choice

The market system automatically corrects a surplus condition in a competitive market by

• A) raising the price of the commodity in question while increasing the quantity demanded.
• B) raising the price of the commodity in question while decreasing the quantity demanded.
• C) reducing the price of the commodity in question while increasing the quantity demanded.
• D) reducing the price of the commodity in question while decreasing the quantity demanded.

Understand the key principles and theories of political economy, including the median voter theorem, Arrow's impossibility theorem, and the concepts of majority rule and unanimity.

Identify and describe the practical application and implications of voting systems such as Borda count and majority rule in various contexts.

Grasp the intersection of economics and psychology as it relates to political economy, including the study of rational vs. irrational behavior, decision making, and the impact of information asymmetry.

Learn about behavioral economics concepts such as time inconsistency, satisficing, adverse selection, and screening as they apply to both individual and political decision making.

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Definitions:

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Drugs used to manage psychosis, including schizophrenia and bipolar disorder, by helping to balance certain chemicals in the brain.

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A severe mental disorder characterized by distorted thinking, perceptions, emotions, language, sense of self, and behavior.

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A form of psychotherapy that focuses on work with families and couples in intimate relationships.