Explain how it would be possible for the equilibrium price and equilibrium quantity to both increase in the market for motorcycles if consumer preference for motorcycles increases and the number of motorcycle manufacturers decreases
What will be an ideal response?
An increase in consumer preference will shift the demand curve to the right, which increases the equilibrium price and the equilibrium quantity. A decrease in the number of manufacturers will shift the supply curve to the left, which will increase the equilibrium price and decrease the equilibrium quantity. In both cases, the equilibrium price increases. For the equilibrium quantity to increase, the rightward shift in demand resulting from the increase in consumer preference must be more than the leftward shift in supply which results from the decrease in manufacturers.
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If business inventories equal $40 billion at the beginning of the year and $55 billion at the end of the year, then, assuming no other changes, GDP must have:
A. increased by $40 billion. B. increased by $15 billion. C. decreased by $15 billion. D. increased by $55 billion.
Refer to the table above. If there is a sixth unit that Jenny consumes, and the marginal benefit derived from that unit is -1, the total benefit derived when the sixth unit has been consumed is:
A) $0. B) $3. C) $29. D) $39.
Which of the following is an example of an "implicit cost"?
A) Interest that could have been earned on retained earnings used by the firm to finance expansion. B) The payment of rent by the firm for the building in which it is housed. C) The interest payment made by the firm for funds borrowed from a bank. D) The payment of wages by the firm.
Refer to the information provided in Figure 15.4 below to answer the question(s) that follow. 
Figure 15.4 Refer to Figure 15.4. Assume The Hand Made Shirt Shop has fixed costs of $75 and is a monopolistically competitive firm. If this firm is attempting to maximize profits, the firm's profit is
A. -$175. B. -$100. C. -$75. D. $0.