Five Hundred Units of Good X Are Currently Bought and Sold

question 153

Multiple Choice

Five hundred units of good x are currently bought and sold. The marginal buyer is willing to pay $40 for the 500th unit, and the cost to the marginal seller is $35 for the 500th unit . We know that

• A) the equilibrium price of good x is somewhere between $35 and $40.
• B) the equilibrium quantity of good x exceeds 500 units.
• C) 500 units is not an efficient quantity of good x.
• D) All of the above are correct.

---

Definitions:

Two-sided Test

A statistical hypothesis test which determines if there is a significant difference in either direction between the groups or variables being studied.

One-sided Test

A hypothesis test in which the alternative hypothesis specifies a direction of the statistical significance, either greater than or less than a certain value.

P-value

The probability of encountering test data at least as extreme as what has been observed, with the assumption that the null hypothesis is valid.

Two-sided Test

A hypothesis test in which the critical area of a distribution is two-sided and tests whether a sample is either greater than or less than a certain range of values.