Ceteris paribus, an increase in the supply of a good causes which of the following?
A. Lowers the equilibrium price, and reduces the quantity bought and sold.
B. Raises the equilibrium price, and raises the quantity bought and sold.
C. Raises the equilibrium price, and increases the quantity bought and sold.
D. Lowers the equilibrium price, and increases the quantity bought and sold.
Answer: D
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Critically evaluate the following statement. "I am definitely in favor of free trade but only if it means fair trade."
What will be an ideal response?
The government imposing a minimum wage is an example of an attempt to:
A. correct a market failure. B. redistribute surplus in a market. C. encourage the consumption of inferior goods. D. discourage the consumption of inferior goods.
If minimum wage legislation does not cause unemployment, then:
A. those who work for minimum wage will benefit. B. firms will generally gain by earning higher profits. C. minimum wages may still be binding for many employees. D. most likely the government won’t study how minimum wage legislation may affect employment.
A comparative advantage in the production of oil is held by
A. Australia.
B. the United States.
C. both countries.
D. neither country.