Suppose we observe the following two simultaneous events in the market for fish. First, there is a decrease in the demand for fish due to changes in consumer tastes. And second, there is a reduction in seafood supply due to oil spills in the oceans. We
know with certainty that these two simultaneous events will cause which of the following?
A) no change in the equilibrium quantity and a reduction in the equilibrium price
B) an increase in the equilibrium quantity and in the equilibrium price
C) a decrease in the equilibrium quantity and an indeterminate change in the equilibrium price
D) a decrease in the equilibrium quantity and an increase in the equilibrium price
Answer: C
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Firms in monopolistic competition resemble monopolies in that both types of firms
a. earn positive economic profits in the long run. b. charge prices higher than their marginal costs. c. possess barriers to entry that keep potential rivals out of the market. d. produce their output so that their average cost is minimized.
Low risk stocks are usually accompanied by
a. low returns b. no returns c. high returns d. no sales-no one would buy low risk stocks
An activity that would not be included in GDP would be:
A. a sweater you knit for your roommate for her birthday. B. getting tomatoes from your garden and making salsa with them. C. paying a company forcleaning your house. D. None of these would be included in GDP.
Refer to the information provided in Figure 2.6 below to answer the question(s) that follow.
Figure 2.6Refer to Figure 2.6. Which of the following is most likely to shift the production possibility frontier from ppf2 to ppf1?
A. the purchase of government Treasury bills B. a change in consumer tastes C. a decrease in the general educational level of the population D. moving resources from consumer goods to capital goods