Suppose the domestic supply (QS) and demand (QD) for MP3 players in the United States is represented by the following set of equations:QS = -25 + 10PQD = 875 - 5PIn the absence of international trade in MP3 players, what will be the price of MP3 players in the United States?
A. $65
B. $70
C. $60
D. $90
Answer: C
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A) are horizontal. B) are vertical. C) have a negative slope. D) have a positive slope.
An individual firm in perfect competition can exercise a significant control over the market price of the good
a. True b. False Indicate whether the statement is true or false
According to the permanent income hypothesis, when income rises above the permanent income level, the household saves at a lower rate than the long-run MPS
a. True b. False Indicate whether the statement is true or false
The Fed lowered interest rates in 2001 and 2002 . This implies, other things the same, that the Fed
a. increased the money supply because it was concerned about unemployment. b. increased the money supply because it was concerned about inflation. c. decreased the money supply because it was concerned about unemployment. d. decreased the money supply because it was concerned about inflation.