Walras believed that the speed of convergence of market prices to the predicted equilibrium price would depend on the relative magnitude of excess demand or excess supply at prices slightly higher or slightly lower than the predicted equilibrium respectively. This would imply that prices convergence to the predicted equilibrium will be faster if:
A) The demand and supply curves are relatively flat.
B) The demand and supply curves are relatively steep.
C) The bids are descending and the asks are ascending.
D) The auctioneer raises the prices when there is a surplus and lowers that price when there is a shortage.
Correct Answer:
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Q16: Suppose the demand curve has the usual
Q17: Suppose the supply curve has the usual
Q18: Suppose the magnitude of consumer surplus is
Q19: Suppose the magnitude of consumer surplus is
Q20: Suppose the magnitude of consumer surplus is
Q22: Which of the following is true in
Q23: Consumer surplus is measured by:
A) The area
Q24: Producer surplus is measured by:
A) The area
Q25: Suppose starting from an initial equilibrium, there
Q26: Suppose starting from an initial equilibrium, there
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