What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery, and fewer doctors decide to enter the field of joint replacement surgery?
A) Supply will decrease, but this will not shift the demand curve.
B) Demand will decrease and supply will increase.
C) Demand and supply will both decrease.
D) Demand will decrease, but this will not shift the supply curve.
C
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The underground economy — the informal sector — can be a significant drag on the economies of developing countries. Why are firms in the informal sector often less efficient than firms in the formal sector?
What will be an ideal response?
Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. How much does Alice produce in the Nash equilibrium?
A. 2,000 B. 1,333.33 C. 800 D. 4,000
Refer to Figure 11.2. Assume the economy is in equilibrium at 1, where real GDP equals potential GDP
The economy experiences a negative demand shock, and the Fed responds by decreasing real interest rates to bring real GDP and inflation back to their original levels. Other things equal, the Fed's response to the negative demand shock is best represented by a movement from A) point B to point D. B) point C to point D. C) point B to point A. D) point C to point A.
The money price of a good is that price
A) expressed in constant 2005 dollars. B) expressed in purchasing power against a common item like bread. C) expressed in today's dollars. D) that would clear the market.