Steak and chicken are substitutes. A sharp reduction in the supply of steak would
a. increase consumer surplus in the market for steak and decrease producer surplus in the market for chicken.
b. increase consumer surplus in the market for steak and increase producer surplus in the market for chicken.
c. decrease consumer surplus in the market for steak and increase producer surplus in the market for chicken.
d. decrease consumer surplus in the market for steak and decrease producer surplus in the market for chicken.
c
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Answer the following statements true (T) or false (F)
1. The relationship between the price of a book and the number of volumes purchased would be an example of microeconomics. 2. Some economic principles are based on physical phenomena. 3. If I stand up at a football game, I can see better. But if we all stand up, we block each other’s view. This is an example of the fallacy of composition. 4. The basic function of any economic system is to provide the framework for allocating scarce resources in a way that adequately satisfies unlimited wants.
In the long run, a monopolistic competitor's price will equal: a. marginal revenue
b. average total cost. c. marginal cost. d. minimum average total cost.
A bank's liabilities are
A) things owned by or owed to the bank. B) things the bank owes to someone else. C) a measure of the bank's net losses. D) included as part of the bank's reserves.
When there is political instability in another country, the United States can expect
A. a decrease in the balance of payments due to a decrease in official reserve transactions. B. an increase in the financial account balance due to the movement of assets to the U.S. C. an increase in the financial account balance due to an increase in the current account. D. a decrease in the balance of payments due to a decrease in the demand for goods and services.