Consider a Market That Is in Equilibrium

question 3

Multiple Choice

Consider a market that is in equilibrium. If the market experiences a decrease in supply:

• A) the equilibrium price and quantity will rise.
• B) the equilibrium price will rise and the equilibrium quantity will fall.
• C) the equilibrium price and quantity will fall.
• D) the equilibrium price will fall and the equilibrium quantity will rise.

Distinguish between direct expenses and those requiring allocation due to joint benefits.

Appreciate the complexity in choosing a fair basis for expense allocation.

Understand the concepts of bond valuation and the calculation of carrying value over time.

Analyze the effects of market interest rates on bond prices and interest expenses.

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Definitions:

Don't Know What To Do

A state of uncertainty or confusion about the course of action to be taken in a situation.

Emergencies Occur Suddenly

A statement describing how emergencies arise without warning, requiring immediate action.

Diffusion Of Responsibility

a socio-psychological phenomenon whereby individuals are less likely to take action or feel a sense of responsibility in the presence of a large group of people.

Obedience To Authority

The tendency to follow orders or directions from someone recognized as a figure of authority.