If the demand for a good increased, what would be the effect on the equilibrium price and quantity?
a. Price would decrease, and quantity would increase.
b. Price would decrease, and quantity would decrease.
c. Price would increase, and quantity would increase.
d. Price would increase, and quantity would decrease.
c. Price would increase, and quantity would increase.
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Suppose the real money demand function is Md/P = 2400 + 0.2Y - 10,000 (r + ?e). Assume M = 4000, P = 2.0, ?e = .03, and Y = 5000. The real interest rate that clears the asset market is
A) 3%. B) 6%. C) 11%. D) 14%.
In competitive markets, the elasticity of labor supply is:
a. unrelated to time. b. inversely proportional to time elapsed since a wage change. c. unity. d. directly proportional to time elapsed since a wage change.
Actual GDP will be below potential GDP
a. when the economy is at full employment. b. during an economic boom. c. when resources are fully utilized. d. during a recession.
Suppose Acme and Mega produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product.
If Acme and Mega decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price, then what will be Mega's economic profit?
A. $100 B. $50 C. $150 D. $0