Discuss the impact of demand and supply changes on market equilibrium price and quantity. Express this graphically.
What will be an ideal response?
An increase in demand will increase equilibrium price and quantity; and vice versa. An increase in supply will decrease equilibrium price and increase the equilibrium quantity; and vice versa. A simultaneous increase in demand and supply will assuredly increase the equilibrium quantity but the impact on equilibrium price is uncertain. A simultaneous increase in demand and decrease in supply will assuredly increase the equilibrium price but the impact on equilibrium quantity is uncertain.?
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Which of the following is not money?
a. Checks b. Coins c. Federal reserve notes d. Debit cards e. Credit cards
As income increases, consumption increases too, but not as rapidly. This is a statement of the:
A. Production function. B. Consumption function. C. Substitution effect. D. Income effect. E. Wealth effect.
Factors of production are the most likely to earn economic rent when they:
A. are used by many different firms. B. are fixed in the short run. C. cannot easily be duplicated. D. have high reservation prices.
If the production possibilities curve is a downward sloping straight line, then
A. technological change has increased. B. all resources must be perfectly adaptable for alternative uses. C. production is efficient only when producing at the mid-point. D. resources are highly specialized, making it difficult to use them for alternative uses.