Refer to the information provided in Figure 3.11 below to answer the following question(s).
Figure 3.11Refer to Figure 3.11. A movement from Point A to Point B on supply curve S2 would be caused by a(n)
A. increase in the price of hamburgers, assuming hamburgers are a substitute for pizza.
B. decrease in the demand for gardenburgers.
C. increase in the price of gardenburgers.
D. increase in the price of tomatoes.
Answer: B
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A member in a cartel can earn more profits by
A) charging a slightly lower price and raising production. B) producing less than the agreed rate. C) selling less than the agreed amount. D) none of the above.
Refer to the above figure. Perfect income equality is shown by
A) the horizontal axis. B) the vertical axis. C) curve A. D) curve D.
As the real interest rate in the domestic loanable funds market increases,
a. the cost of purchasing goods and services during the current period will decrease. b. the net inflow of capital from abroad will increase. c. the inflationary premium will rise and the money rate of interest will decline. d. a trade surplus will occur.
The supply and demand model is the workhorse of the principles of economics because it:
A. follows directly from the inductive approach to economics. B. is a useful model by which students can be introduced to economic reasoning. C. does not have to have any empirical testing to back up the results of the model. D. is a perfect model and can never be improved upon.