Suppose that the average price of refrigerators has fallen over the past few years, yet the refrigerator companies have offered more and more of them for sale. Does this mean that the supply curve for refrigerators is downward sloping? Explain
The reason that refrigerator prices have fallen is likely a result of a change in one of the determinants of supply. For example, a technological improvement in the production of refrigerators may have occurred. This advance in technology would cause the supply curve for refrigerators to shift to the right, lowering equilibrium price and raising the equilibrium quantity. Since one of the determinants of supply has changed, this is not a case of a movement along a supply curve (and thus does not violate the law of supply).
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Suppose that the labor movement has a revival in the US and the majority of workers join labor unions. As a result you would expect
A) the unemployment rate to rise. B) the unemployment rate to fall. C) the aggregate demand curve to shift rightward.
If the Gini coefficient is 1, this means that __________.
a. the income distribution is completely equal b. the income distribution is completely unequal c. that there is no income distribution
What is the advantage of the government imposing an ad valorem tax over a specific tax when facing a monopoly?
What will be an ideal response?
In the market for insurance, low risk customers are not served because
a. They do not like buying insurance b. They are more costly to serve c. Products designed to be attractive to them are also attractive to high risk types. d. All of the above