If the supply of a product increases, then we would expect equilibrium price
a. to increase and equilibrium quantity to decrease.
b. to decrease and equilibrium quantity to increase.
c. and equilibrium quantity to both increase.
d. and equilibrium quantity to both decrease.
b
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The above figure shows a payoff matrix for two firms, A and B, that must choose between a high-price strategy and a low-price strategy. For firm A,
A) setting a low price is the dominant strategy. B) setting a high price is the dominant strategy. C) setting a high price when firm B sets a high price, and setting a low price when firm B sets a low price is the dominant strategy. D) setting a high price when firm B sets a low price, and setting a low price when firm B sets a high price is the dominant strategy.
After full adjustment to a price change has occurred, the absolute price elasticity of demand for an item is equal to 1. In the short run, the absolute price elasticity of demand for the item was probably
A) less than 0. B) greater than 0. C) less than 1. D) greater than 1.
The taxation principle that says people with higher incomes should pay more in taxes than those with lower incomes is called
A. A flat tax system. B. A regressive tax system. C. Horizontal equity. D. Vertical equity.
If the inflation rate exceeds the nominal rate of interest:
a. the real interest rate is negative. b. All of the answers are correct. c. lenders lose. d. savers lose.