The Red Jacket Mountain View Inn in New Hampshire charges $150 per room in the winter ski season and $90 during the summer months. The number of rooms and operating costs are constant year round. Which of the following best explains the price difference?
a. There is a rightward shift in demand in the summer.
b. There is a rightward shift in demand in the winter.
c. There is a leftward shift in demand in the winter.
d. There is a leftward shift in the supply curve in the summer.
b. There is a rightward shift in demand in the winter.
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If the price is above the equilibrium price, then there is a
A) surplus, and market forces will operate to lower price. B) surplus, and market forces will operate to raise price. C) shortage, and market forces will operate to lower price. D) shortage, and market forces will operate to raise price.
Firms that are price takers
A) can raise their prices as a result of a successful advertising campaign. B) are able to sell all their output at the market price. C) are able to sell a fixed quantity of output at the market price. D) must lower their prices to increase sales.
According to the graph shown, if the market is in equilibrium, producer surplus is:
A. $30.
B. $20.
C. $50.
D. $60.
What prompted the large increase in tax rates in 1932 in the midst of an economic recession?
a. concern that inflation would rise due to increases in real output and aggregate demand b. expansionary fiscal policy designed to stimulate aggregate demand c. the Keynesian view that taxes should be increased during a recession d. the view that the federal government should maintain a balanced budget