Suppose demand decreases and supply increases. Which of the following will happen?
a. Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease.
b. Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase.
c. Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase.
d. Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease.
e. The change in equilibrium price and quantity cannot be determined.
D
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An efficiency wage premium serves the same function as a bond because, just as with a bond, the premium represents
A) the amount the employee loses if caught shirking. B) the expected value of the amount the employee loses if he shirks. C) the cost of monitoring the employee. D) the gain to the employee if he shirks.
Price discounts to selected buyers with the intent of driving out smaller competitors is
a. widespread in all industries b. common in the retailing industry only c. illegal under the Robinson-Patman Act d. allowed if the four-firm concentration ratio is less than 50 percent e. beneficial to consumers in the long run
With fixed exchange rates, external capital-flow shocks have little impact on a country's economy.
Answer the following statement true (T) or false (F)
When governments grant patents:
A. producers earn profits that are substantially higher than would occur in a competitive market. B. consumers pay a higher price than they would in a competitive market. C. consumers are likely to pay lower prices than they would in a competitive market. D. both producers earn profits that are substantially higher than would occur in a competitive market and consumers pay a higher price than they would in a competitive market are correct.