Suppose that the equilibrium price of T-shirts increases and the equilibrium quantity of T-shirts decreases. This is best explained by:
A. an increase in the demand for T-shirts.
B. a decrease in the supply of T-shirts.
C. a decrease in the demand for T-shirts.
D. an increase in the supply of T-shirts.
Answer: B
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An effective minimum wage tends to create unemployment among unskilled workers because it
A) reduces the demand for their labor services. B) increases the supply of their labor services. C) reduces the marginal productivity of their labor services. D) reduces the quantity demanded for their labor services while increasing the quantity supplied of their labor services. E) generates all of the above.
An early sign that financial innovation might be leading toward a financial crisis is ________
A) deleveraging B) a bank panic C) a credit boom D) debt deflation
With respect to the Keynesian liquidity trap, at very low levels of income, equilibrium in the money market occurs at points along the flat portion of the money demand schedule where
a. the elasticity of money demand is extremely high. b. money demand is associated with a low interest elasticity. c. money demand is completely interest inelastic. d. None of the above
What's the dominant strategy for each firm?
a. Charge a low price b. Charge a high price c. Firm A charge a low price and firm B charge a high price d. Firm A charge a high price and firm B charge a low price