If the supply and demand curves for a product both decrease, then equilibrium:
A. quantity must fall and equilibrium price must rise.
B. price must fall, but equilibrium quantity may rise, fall, or remain unchanged.
C. quantity must decline, but equilibrium price may rise, fall, or remain unchanged.
D. quantity and equilibrium price must both decline.
Answer: C
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The marginal cost of labor, MCL, is defined as the
A) total cost of producing a certain amount of output. B) total cost of hiring an additional worker. C) additional cost of hiring an additional worker. D) additional fixed cost of producing an additional unit of output.
Faced with the evidence of poor working conditions and low wages in the border maquiladoras, economists
A) shrug their shoulders and ignore the issue. B) agree that trade theory is thus proven hollow and internally inconsistent. C) argue that U.S. consumers should not consume lettuce. D) argue that the poor conditions and low wages are actually improvements for the Mexican workers, and may be cited as gains-from-trade. E) argue that Mexico's generally high overall productivity offsets these conditions.
As the slope of the aggregate supply curve increases, this indicates that
a. the economy is getting close to potential GDP. b. the economy is reducing employment. c. inflation will be less of a problem. d. output is falling.
When the U.S. dollar appreciates,
a. U.S. exports rise. b. U.S. imports decline. c. aggregate demand shifts inward. d. aggregate demand shifts outward.