With a downsloping demand curve and an upsloping supply curve for a product, a decrease in resource prices will:
A. increase equilibrium price and quantity.
B. decrease equilibrium price and quantity.
C. decrease equilibrium price and increase equilibrium quantity.
D. increase equilibrium price and decrease equilibrium quantity.
Answer: C
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Merchandise exports minus imports equal the
A) basic balance. B) liquidity balance. C) official settlements balance. D) balance of trade.
When Monique drives to work every morning, she drives on a congested highway. What Monique does not realize is that when she enters the highway each morning she increases the travel time of all other drivers on the highway. In this case, the external cost of Monique's highway trip
a. increases the social cost above the private cost. b. lowers the social cost below the private cost. c. increases the social value above the private benefit. d. decreases the social value below the private benefit.
The more rapidly the government creates money to finance its budget deficits, the:
A. smaller the inflation tax and the greater the reduction in the real value of any assets specified in nominal terms. B. smaller the inflation tax and the smaller the reduction in the real value of any assets specified in nominal terms. C. greater the inflation tax and the smaller the reduction in the real value of any assets specified in nominal terms. D. greater the inflation tax and the greater the reduction in the real value of any assets specified in nominal terms.
Suppose a monopoly faces an inverse demand curve of P = 300 ? 10Q and has constant marginal cost of 20. If the government is considering legislation that would regulate price to the competitive level, what is the maximum amount the monopoly would spend on (legal) lobbying activities designed to thwart the regulation?
A. $280 B. $2,240 C. $1,960 D. None of the statements is correct.