In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. A decrease in the number of consumers of product X will:
A. increase D, increase P, and increase Q.
B. decrease S, decrease P, and decrease Q.
C. decrease D, decrease P, and increase Q.
D. decrease D, decrease P, and decrease Q.
Answer: D
You might also like to view...
What insight into human behavior do economist learn from observing people playing the ultimatum game?
The nominal interest rate is determined in the:
A. stock market. B. money market. C. exchange market. D. bond market.
Figure 4.3 illustrates the demand for tacos. A successful advertising campaign to sell tacos would bring about a movement from:
A. point a to point b. B. point c to point b. C. D2 to D1. D. D0 to D1.
Suppose the price of lumber decreases. In the market for new homes, we would expect which of the following to occur?
A) the market clearing price will fall and the equilibrium quantity will rise. B) the market clearing price will rise and the equilibrium quantity will fall. C) both the market clearing price and the equilibrium quantity will fall. D) both the market clearing price and the equilibrium quantity will rise.