Which of the following is true for the law of supply?
A. Buyers decrease the quantity of a good purchased as price increases.
B. Sellers increase the quantity of a good supplied as price increases.
C. Price decreases as more units are supplied.
D. A decrease in price results from more demand.
Answer: B
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If the government wants to encourage spending on research and development, it should
a. reduce patent protection so many individuals can use new products in their own research b. shorten the number of years during which a developer has exclusive patent rights to market an invention c. increase the number of years during which an inventor has exclusive patent rights to market an invention d. raise tax rates on corporate profits to raise money for the research e. encourage firms and households to spend money instead of saving it
Using Figure 2 above, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE3 might be:
A. domestic income increases. B. interest rates decrease. C. wealth level decreases. D. expected profitability of investments decrease.
If the equilibrium price of bread is $2 and the government imposes a $1.50 price ceiling on the price of bread, then:
a. more bread will be produced. b. there will be a shortage of bread. c. the demand for bread will decrease. d. producers will charge $0.50 for bread. e. $0.50 in tax revenue will be paid for each unit of bread.
One effect of a minimum wage in the market for low-skilled labor is
A) a shortage of low-skilled labor. B) a surplus of low-skilled labor. C) no effect in the market for low-skilled labor. D) an increase in demand for low-skilled labor.