Refer to the accompanying figure. The equilibrium price is ________, and the equilibrium quantity is ________.
A. $30; 15
B. $25; 5
C. $25; 20
D. $35; 20
Answer: D
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When there is a positive externality in a free market, too much of the good is produced and consumed
Indicate whether the statement is true or false
The total income earned by residents of an economy is known as
A) private disposable income B) gross national product C) gross domestic product D) national income E) none of the above
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.
Policymakers' attempts to use the Phillips curve to reduce the unemployment rate below the natural rate
A. will be successful if monetary policy is used. B. will be unsuccessful if monetary policy is used since monetary policy leads to higher prices. C. will be unsuccessful since workers' expectations adjust to attempts to reduce unemployment below the natural rate. D. will be successful since the Phillips curve shows the relationship between the inflation rate and the unemployment rate.