"If,at the Initial Price,there Is Excess Demand,the Price Will Rise

question 1

Multiple Choice

"If,at the initial price,there is excess demand,the price will rise.As a consequence,the demand curve shifts down since people buy less at a higher price,and the supply curve shifts up because producers find it profitable to supply more output at a higher price.Price will continue to adjust until there is no excess demand." Which of the following is true about this statement?

• A)The quotation is correct.
• B)The quotation confuses excess supply with excess demand.
• C)The quotation confuses movements along curves with shifts in curves.
• D)The quotation confuses short-run adjustments with long-run adjustments.

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Definitions:

Probabilities

The mathematical likelihood of various outcomes occurring based on certain assumptions or historical data.

Systematic errors

Errors that consistently occur in the same direction every time a measurement is made, affecting the accuracy of results across a dataset.

Heuristics

Cognitive shortcuts or rules of thumb that simplify decision making by reducing complex problem-solving to simpler judgment processes.

Ethical implications

The moral consequences or considerations arising from actions, decisions, or policies in personal, professional, or organizational contexts.