Suppose That the Number of Buyers in a Market Increases

question 150

Multiple Choice

Suppose that the number of buyers in a market increases and expectations of the price of the good indicate that its price will rise in the future.What would we expect to happen in the market?

• A)the equilibrium price would increase but the impact on the amount sold in the market would be ambiguous
• B)the equilibrium price would decrease but the impact on the amount sold in the market would be ambiguous
• C)both equilibrium price and equilibrium quantity would increase
• D)equilibrium quantity would increase but the impact on equilibrium price would be ambiguous

---

Definitions:

Below-Average Earnings

refer to income levels that are lower than the average earnings within a specified population or employment sector.

Social Security System

A government program that provides financial assistance to people with inadequate or no income, especially the elderly and disabled.

Highest-Valued Alternative

The best next option forgone as a result of making a particular decision, often related to the concept of opportunity cost.

Production Possibilities Curve

A curve that outlines all possible combinations of total output that could be produced, assuming (1) a fixed amount of productive resources, (2) a given amount of technical knowledge, and (3) full and efficient use of those resources. The slope of the curve indicates the amount of one product that must be given up to produce more of the other.