Answer the following questions true (T) or false (F)
1. If the demand for a product decreases and the supply of the product does not change, equilibrium price and equilibrium quantity will both increase.
2. If the demand curve for a product shifts to the right and the supply curve for the product shifts to the left, equilibrium price and equilibrium quantity will both increase.
3. A monopoly is defined as a firm that has the largest market share in an industry.
1. FALSE
2. FALSE
3. FALSE
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
What did China create to allow more international trade?
A) Special economic zones B) Foreign exchange centers C) More open and transparent government meetings D) New educational efforts
Which of the following consumers would most likely be helped by a price ceiling?
a. Because of his low income, Ben can afford to rent an apartment at only $800 per month. b. Because of her significant raise, Juanita can afford a $30,000 car. c. Because of his sizable inheritance, Jacques can add an expensive addition to his home. d. Because of her steady income, Roberta can rent a vacation home in Hawaii.
Suppose there are two small island countries: Avarice, which is populated by people who are completely self-interested, and Altruism, which is populated by people who have adopted social norms of generosity and cooperation. Suppose residents of each island often play prisoner's dilemma games, always matched with a person from the same island, but not a person who they know or will play with again. If the same number of games is played on each island, you would expect:
A. players on both islands to quickly converge to playing their dominant strategies. B. the residents of Altruism to have higher average payoffs than the residents of Avarice. C. players on both islands to quickly converge to playing their dominated strategies. D. the residents of Avarice to have higher average payoffs than the residents of Altruism.