In the above figure, the shift in the demand curve from D to D2 can be the result of
A) an increase in the price of soda, a complement to pizza.
B) a decrease in the supply of pizza that raises the price of pizza.
C) an increase in income if pizza is a normal good.
D) a change in quantity demanded.
E) an increase in the price of a sub sandwich, a substitute for pizza.
A
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The regulation of natural monopolies is common in which of the following industries?
A. Electricity B. Oil C. Tobacco D. Alcohol
Draw a graph illustrating a competitive firm in short-run equilibrium that is earning an economic profit. Be sure to label all curves and axes correctly.
What will be an ideal response?
If the Federal Open Market Committee (FOMC) decides to expand the money supply, then: a. it will issue directions to sell U.S. government securities, thus increasing the velocity of circulation of the money supply. b. it will issue directions to purchase U.S. government securities, thus putting more reserves in the hands of banks. c. it will order new Federal Reserve notes delivered to member
banks. d. it will raise the discount rate to member banks.
Why do people hold money? Explain the reasons.
What will be an ideal response?