Shortages Occur Because

question 13

Multiple Choice

Shortages occur because

• A)our wants are greater than can be satisfied with the resources available.
• B)the price of a good or service is too high for people to afford it.
• C)the price of a good or service is set by firms trying to make large profits.
• D)the price of a good or service is below its equilibrium level.

Identify factors that cause shifts in real GDP and nominal GDP across different time periods.

Apply knowledge of economic indicators to assess the health and trends in an economy.

Learn how to calculate changes in price levels and inflation rates between different years.

Understand the conceptual distinction between measuring GDP using current-year versus base-year prices.

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Definitions:

Market Value

The prevailing market rate at which a commodity or service is traded.

Retail Inventory Method

An accounting technique used to estimate inventory value by converting retail prices to cost prices.

Cost To Retail Ratio

A method to estimate the value of ending inventory and cost of goods sold based on the ratio of cost to the retail price of goods.

Ending Inventory

The cost of items on offer at the close of an accounting term.