Suppose the pizza at Pizza House and Little Weezer's are fairly close substitutes. If Pizza House raises their price 20%, and Little Weezer's keeps their price unchanged, which is most likely to occur?
A) The demand for Little Weezer's pizza will increase
B) The demand for Pizza House pizza will decrease
C) Both A and B
D) None of the above
A
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If the AD curve shifts rightward, then
A) both the price level and real GDP will decrease. B) both the price level and real GDP will increase. C) the price level will increase, but no change will occur in real GDP. D) the price level will not change, but real GDP will increase. E) potential GDP increases.
Suppose the optimal amount of X is 100 units and that the market provides 123 units. This situation is descriptive of
A. externality provision. B. market failure. C. asymmetric information. D. a public goods problem. E. the free-rider dilemma.
An increase in the demand for bonds will increase both the price of bonds and the quantity of bonds held
a. True b. False
If the percentage increase in the quantity supplied is greater than the percentage increase in the price, the supply:
A. is perfectly elastic. B. is elastic. C. is inelastic. D. is unit elastic.