What will happen to the equilibrium price and equilibrium quantity of ice cream cones when consumers' incomes decrease?
A) If ice cream cones are a normal good, then the equilibrium price and quantity of ice cream cones will decrease.
B) If ice cream cones are a normal good, then the equilibrium price and equilibrium quantity of ice cream cones will increase.
C) If ice cream cones are an inferior good, then the equilibrium price for an ice cream cone will increase and the equilibrium quantity of ice cream cones will decrease.
D) If ice cream cones are an inferior good, then the equilibrium price and quantity of ice cream cones will decrease.
A
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According to the Taylor rule, the Federal Reserve lowers the real interest rate as the output gap ________ or the inflation rate ________.
A. decreases; increases B. increases; decreases C. decreases; decreases D. increases; increases
A possible advantage of a horizontal merger for the economy is that
A) the government stands to collect more corporate income tax revenue. B) the merged firm might reap economies of scale which could translate into lower prices. C) the merging firms could avoid losses. D) the degree of competition in the industry will be intensified.
Is this outcome efficient?
a. Yes because both of them are maximizing their payoffs b. No, because both of them can do better than their current equilibrium c. No, because cheating is goodNo, because cheating is good d. All of the above
If a potato farmer expands output, he finds that the increase in total revenue is less than the increase in total costs. This means that:
a. profit is being maximized. b. he should not have expanded output. c. he should produce even more output. d. the firm is wasting resources. e. the farmer should go out of business.