For each of the following changes, show the effect on the supply curve and state what will happen to market equilibrium price and quantity in the short run
a. The government requires pollution control filters that raise costs on goods.
b. Wages of workers in this industry fall.
c. There is an improvement in technology.
d. The price of the good falls.
e. Producers expect that the price of the good will fall in the future.
a. Supply decreases; equilibrium price rises and quantity falls.
b. Supply increases; equilibrium price falls and quantity rises.
c. Supply increases; equilibrium price falls and quantity rises.
d. This is a movement along the supply curve, and the quantity supplied will decrease.
e. Supply increases (now); equilibrium price falls and quantity rises.
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The official number of poor in the United States
A) is higher today than at any other time in our history. B) has risen steadily since 1981. C) was lowest in the late 1960s. D) is lowest today.
Bigness, or large firms, may benefit consumers in which of the following ways?
A. Larger firms usually charge lower prices than smaller firms. B. Larger firms with monopoly power definitely have greater incentive to be efficient and innovative. C. Larger firms may take advantage of economies of scale and scope. D. Larger firms are more responsive to consumers’ desires.
The World View "Rebounding Oil Price Spurs More Rigs" related to oil prices and oil rigs suggests.
A. Oil rigs have found new supplies of oil, indicating that the demand for oil is inelastic. B. As the price of oil rises, the quantity supplied falls. C. As the price of oil increases, there is an increase in oil rigs and thus the amount of quantity supplied, indicating that supply is elastic. D. Oil rigs around the world have had difficulty finding additional sources of oil, indicating that the elasticity of supply is inelastic.
Under which one of the following situations would you be better off?
A) You have $10,000 in your savings account paying 5 percent per year and unanticipated inflation is 8 percent per year. B) You have paid $500 for a $1,000 U.S. savings bond that matures in 10 years and unanticipated inflation is 10 percent per year. C) You lend a friend $1,000 at 6 percent to be repaid in one year and unanticipated inflation is 7 percent during the year. D) You borrowed $2,500 at 7 percent to pay for this year's college expenses and unanticipated inflation is 12 percent during the year.