We cannot predict the effect on the market clearing price, but know that the equilibrium quantity will increase when
A. supply and demand for a product simultaneously increase.
B. supply decreases and demand increases.
C. supply increases and demand decreases.
D. supply and demand for a product simultaneously decrease.
Answer: A
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A system for studying strategic behavior in economics is called
a. decision science. b. political economy. c. game theory. d. solution concepts.
The law of supply states that, holding other factors constant, as price increases
a. Quantity supplied increases b. Quantity supplied decreases c. Quantity demanded increases d. Quantity demanded decreases
If individuals behave irrationally in some circumstances, why do economists typically assume that they behave rationally? a. The assumption of rationality allows economists to make powerful statements that apply the majority of the time. b. The assumption of rationality was used before psychologists discovered ways in which individuals behave irrationally. c. The assumption of rationality is
used because economists do not understand principles of psychology. d. The assumption of rationality has yet to be refuted with scientific evidence.
An expansionary fiscal policy would consist of (1) _____ and/or (2) _______.
Fill in the blank(s) with the appropriate word(s).