Refer to the figure below. Assume the market is originally at point W. Movement to point Y is the result of: 
A. an increase in supply and an increase in demand.
B. a decrease in supply and an increase in quantity demanded.
C. an increase in supply and an increase in quantity demanded.
D. an increase in demand and an increase in quantity supplied.
Answer: C
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A line that represents combinations of two goods that a consumer can purchase with a fixed income and given price for each good is called the:
a. indifference curve. b. demand curve. c. budget line. d. money line.
Fiscal policy under the Reagan administration was intended to: a. stimulate the economy by decreasing taxes in order to increase consumption
b. increase tax revenues by increasing the tax rate. c. balance the budget by increasing defense spending and increasing taxes. d. stimulate the economy by decreasing taxes in order to increase aggregate supply. e. stimulate the economy by increasing government spending in order to increase aggregate supply.
Why do fads often lead to shortages, at least in the short term?
A. Demand increases too quickly and unexpectedly for the supply to keep up. B. Laws prevent stores from responding to excess demand in time to prevent a shortage. C. Buyers and sellers are unable to agree on a price for the good. D. Manufacturers charge such high prices for the goods that stores are unwilling to pay.
Ideally, a free trade policy should be accompanied by
A. a public education program to make the benefits known. B. open borders and amnesty for all undocumented workers. C. programs to ensure no one loses a job as a result of foreign competition. D. programs to assist workers who lose their jobs to foreign competition.