Which of the Following Statements Is Assumed to Be True

question 45

Multiple Choice

Which of the following statements is assumed to be true of a market?

• A) In a market, the demand and supply curves intersect only at one point.
• B) The quantity supplied in a market falls when the price of the good increases.
• C) Since demand and supply curves intersect, a market will always be in equilibrium.
• D) When the market price of the good falls, the demand curve shifts to the right.

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Definitions:

Production Possibility Frontier

A graph showing the highest possible combinations of two goods that can be made using existing resources and technology.

Output Efficiency

The optimized state where goods or services are produced at the lowest possible cost and with the best allocation of resources.

Marginal Rate

The rate at which one variable changes with respect to a slight change in another variable, often used in the context of taxes or production.

Transformation

The process of changing the structure, appearance, or character of something, often seen in economic contexts as shifts in production or technology.