If There Is a Shortage of a Good, We Would

question 123

Multiple Choice

If there is a shortage of a good, we would expect that as a result

• A)fewer resources will be allocated to the production of the good.
• B)the price of the product will rise.
• C)the price of the product will fall.
• D)the supply curve will shift left and the demand curve will shift right, eliminating the shortage.
• E)the supply curve will shift right and the demand curve will shift left, eliminating the shortage.

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Definitions:

Gratuitous Promise

A voluntary promise or agreement without consideration, where the promisor is not legally bound to fulfill the promise.

Common Law

A legal system based on judicial decisions and precedents rather than statutory laws, common in many English-speaking countries.

Consideration

Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

Quantum Meruit

A legal principle meaning "as much as he has deserved," allowing a person to recover reasonable compensation for services or goods provided when no contract exists, or where a contract exists but precise amounts are not specified.