Assume that both the demand curve and the supply curve for DVD players shift to the left but the supply curve shifts more than the demand curve. As a result,
A) both the equilibrium price and quantity of DVD players will decrease.
B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.
C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase.
D) the equilibrium price of DVD players will increase; the equilibrium quantity will decrease.
D
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If monopolistically competitive firms earn short-run economic profits, we expect to see
A) new firms enter the industry, which shifts the demand curves of the existing firms to the left until firms earn zero economic profits. B) new firms trying to enter the industry, but unable to do so because of barriers to entry. C) existing firms altering their scale of plant to try to capture larger profits. The combined effect is to cause all firms to earn zero economic profits. D) existing firms increasing prices to try to capture larger economic profits.
Which statement is true?
A. On the production possibilities frontier, 85 percent of capital is employed. B. If we moved closer to the origin and further away from the production possibilities frontier, unemployment would increase. C. To have economic growth, we must push the production possibilities frontier outward. D. All of the statements are true.
Explain some important situations where direct controls have a clear advantage over taxes.
What will be an ideal response?
As the dollar price of a euro falls
A) U.S. residents will purchase fewer French imports. B) the quantity of euros supplied will increase. C) French goods will be less expensive to U.S. residents. D) French residents will increase their purchases of U.S. assets.