If demand and supply both decrease
A) the equilibrium quantity definitely will decrease, and the market clearing price definitely will decrease.
B) the equilibrium quantity definitely will decrease, and the market clearing price definitely will increase.
C) the market clearing price definitely will decrease, but the change in the equilibrium quantity cannot be determined without more information.
D) the equilibrium quantity definitely will decrease, but the change in market clearing price cannot be determined without more information.
D
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The quantity produced in a monopolistically competitive market is ________ than the quantity produced in a perfectly competitive market, and the price charged in a monopolistically competitive market is ________ than the price charged in a perfectly
competitive market. A) higher; higher B) lower; higher C) higher; lower D) lower; lower
How does the construction of a market demand curve for a private good differ from that for a public good?
A) There is no difference; in both cases the demand curve is determined by adding up the price each consumer is willing to pay for each quantity of the good. B) The market demand curve for a private good is determined by adding up the price each consumer is willing to pay for each quantity of the good but the market demand curve for a public good is determined by adding up the quantities demanded by each consumer at each price. C) There is no difference; in both cases the demand curve is determined by adding up the quantities demanded by each consumer at each price. D) The market demand curve for a private good is determined by adding up the quantities demanded by each consumer at each price but the market demand curve for a public good is determined by adding up the price each consumer is willing to pay for each quantity of the good.
Two economists from Ohio University estimated that the demand curve for kerosene in Indonesia was such that a 10 percent increase in the price reduced the quantity demanded by 2.2 percent and that a 10 percent increase in the price of electricity increased the demand for kerosene by 1.6 percent. This indicates that (i) the demand for kerosene is price inelastic and (ii) kerosene and electricity are substitutes. Which of these two statements is correct?
A. i and ii B. i not ii C. ii not i D. neither i nor ii
When the Fed decreases the money supply, interest rates
a. rise, causing velocity to fall. b. fall, causing velocity to fall. c. rise, causing velocity to rise. d. fall, causing velocity to rise.