When the Price of a Good Is Below Its Equilibrium

question 140

Multiple Choice

When the price of a good is below its equilibrium value,

• A) consumers will bid the price up.
• B) excess supply will occur.
• C) it will tend to stay below the equilibrium value.
• D) suppliers will notice their inventories are growing.
• E) suppliers will lower the pricE.

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Definitions:

Crystallized Intelligence

The aspect of intelligence that involves the ability to use learned knowledge and experience.

Fluid Intelligence

The capacity to think logically and solve problems in novel situations, independent of acquired knowledge.

Concrete Operational Thought

A stage in Jean Piaget's theory of cognitive development where children (ages 7-12 approximately) gain the ability to think logically about concrete events.

Fluid Intelligence

The ability to think abstractly, reason, identify patterns, and solve problems quickly in novel situations.