Assume that goods X and Y are substitutes and are produced in perfectly competitive markets. If there is a decrease in the supply of good X, which of the following will happen in the market for good Y in the long run?
A) Firms will exit, causing market price to rise.
B) Firms will enter, causing market price to fall.
C) Price will be higher at the new long-run equilibrium as a result of entry into the market.
D) The firms that were already in the industry will continue to earn positive economic profit.
B
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The United States would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas
Indicate whether the statement is true or false
Suppose Lisa spends all of her money on books and bagels, and a bagel is an inferior good for her. When the price of coffee increases, the
A) consumption of coffee will fall. B) consumption of coffee will rise. C) consumption of coffee will not change. D) Not enough information.
Consider an investment with the following payoffs and probabilities: State of the Economy Probability Return GDP grows slowly .70 1,000 GDP grow fast .30 2,000 Let the expected value in this example be 1,300 . How do we find the standard deviation of the investment?
a. ? = ? { (1000-1300)2 + (2000-1300)2 } b. ? = ? { (1000-1300) + (2000-1300) } c. ? = ? { (.5)(1000-1300)2 + (.5)(2000-1300)2 } d. ? = ? { (.7)(1000-1300) + (.3)(2000-1300) } e. ? = ? { (.7)(1000-1300)2 + (.3)(2000-1300)2 }
If the exchange rate between the yen and the dollar changes from 100 yen = $1 to 110 yen = $1, then:
a. the dollar has depreciated in value. b. U.S.-made goods will become less expensive to Japanese citizens. c. the dollar has appreciated in value. d. Japanese-made goods will become more expensive to U.S. citizens. e. there will be an increase in the demand for dollars in the foreign exchange market.