Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point D to Point B, the opportunity cost of hybrid cars, measured in terms of motorcycles,
A. initially increases, then decreases.
B. increases.
C. remains constant.
D. decreases.
Answer: B
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An increase in the supply of the product implies:
a. producers will now charge a higher price for a given quantity of output. b. the supply curve will shift to the left. c. some producers are dropping out of this market. d. producers will now charge a lower price for a given quantity of output. e. the price of this product has increased.
The aggregate supply curve is
a. a curve showing the quantities of total output that business will purchase for investment at various price levels. b. a curve showing the quantities of total output that will be offered for sale at various price levels. c. a curve showing the quantities of goods and services that households will provide at various price levels. d. one point on the aggregate expenditure curve.
Give an example not in the text of how price ceilings can lead to a shortage.
What will be an ideal response?
Refer to Scenario 3.3 below to answer the question(s) that follow.SCENARIO 3.3: -Mustard and mayonnaise are substitutes. -Mustard and relish are complements. -Mustard is a normal good. -During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves.Refer to Scenario 3.3. The mustard recall would have caused the equilibrium price of mayonnaise to ________ and the equilibrium quantity of mayonnaise to ________.
A. increase; increase B. decrease; increase C. increase; decrease D. decrease; decrease