The Diagram Below Shows the General Equilibrium Model for X

question 29

Multiple Choice

The diagram below shows the general equilibrium model for X and Y for a small hypothetical economy. Point A in this diagram represents positions where

• A)there is an excess supply of good X.
• B)there is an excess demand for good X.
• C)the economy is at an economically efficient allocation of resources.
• D)good Y costs less to produce than its production cost at pointC.

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Definitions:

Valid

Well-founded on evidence and corresponds accurately to the real world.

Cognitive Capacities

The various abilities related to the process of knowing, including reasoning, memory, attention, and language.

Laboratory Experiments

Controlled research studies conducted in a lab setting where variables can be manipulated to observe their effect on other variables.

Generalized Intelligence

A theory proposing that intelligence is a single, general ability that influences performance across a variety of tasks and situations.