Economist Jones defines an increase in supply as a decrease in the prices needed to ensure various amounts of a good being offered for sale. Economist Brown defines an increase in supply as an increase in the amounts that producers will offer at various
possible prices. Economist Cole defines an increase in supply as an increase in the amount firms will offer in the market which is caused by an increase in the price of the product. Which, if any, of these is defining an increase in supply correctly?
Please provide the best answer for the statement.
Economists Brown and Jones are both correct. Brown recognizes that a shift in supply means greater quantities will be supplied at each of the various prices given for the original supply schedule. In other words, more will be supplied at each of the prices on the original schedule. Jones is correct if a decrease in prices would actually ensure the various amounts of a good being offered for sale at lower prices than the original. It is an equivalent statement to Brown’s. Cole is not correct. Cole is defining a change in the quantity supplied, or a movement along the supply curve, not an increase in supply.
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Suppose that you deposit $2,000 in your bank and the required reserve ratio is 10 percent. The maximum loan your bank can made as a direct result of your deposit is
A) $200. B) $1,800. C) $2,000. D) $20,000.
The Buda Agri Corporation is the sole employer in rural Hungary. In the labor market, Buda Agri is a
A) monopolistic competitor. B) perfect competitor. C) monopsony. D) monopoly.
Segmentation involves classifying customers based on their importance. Which tools are used to classify customers?
a. ABC classification (Pareto's Law) b. Customer profitability analysis c. Balanced investment strategy d. Customer loyalty program e. None of the above f. Only A and B
You value your economics textbook at $10. Someone else values it at $25, and that person is willing to pay you $20 for your textbook. Would selling your textbook to this person for $20 be Pareto efficient?
A. Yes, because both of you are better off as a result of the trade. B. No, the person paid you $20 for the book so his net benefit was only $5, whereas your net benefit was $10. For this change to be Pareto efficient, each of you should have the same net benefit. C. Yes, because even though you gain from the trade and he loses, there is the potential for you to compensate him for his loss. D. No, because you did not receive the maximum amount the other person would have been willing to pay for the textbook.