Suppose the equilibrium price of a gallon of gasoline drops from $3.00 to $2.85 and the equilibrium quantity increases from 365 millions of gallons per week to 372 millions of gallons per week. These changes can be the result of
A) an increase in supply.
B) an increase in demand.
C) a decrease in supply.
D) a decrease in demand.
A
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The existence of discouraged workers will lead to an official unemployment rate that is
A) overstated. B) understated. C) either overstated or understated. D) unbiased.
80% of the total number of people in Genovia with health insurance are above 40 years of age. Which of the following economic concepts helps in explaining this fact?
A) The concept of negative externalities B) The concept of adverse selection C) The concept of free riding D) The concept of positive externalities
A minimum wage might increase employment by a monopsony if it makes the supply of labor curve to that firm
A) steeper, that is, makes supply more elastic. B) steeper, that is, makes supply less elastic. C) flatter, that is, makes supply more elastic. D) flatter, that is, makes supply less elastic.
Sarah and David both have linear demand curves for lemonade. Sarah's demand is more elastic than David's. At the current price of $0.50 per glass, they both choose to buy 5 glasses. A change in the price of lemonade to $0.75 per glass will
A) decrease Sarah's consumer surplus more than David's. B) decrease David's consumer surplus more than Sarah's. C) increase Sarah's consumer surplus more than David's. D) increase David's consumer surplus more than Sarah's.