In which direction does the demand curve shift when demand decreases?
a. down
b. up
c. left
d. right
c. left
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You can invest $100,000 into either project A or B. You estimate that A would succeed with a probability of 0.5 in which case it doubles in value. If it fails, its scrap value is $50,000 . Project B would succeed with probability 0.8, in which case it would have a value of $150,000 . If it fails, project B's scrap value is $30,000 . Which project should you invest in?
a. Project A b. Project B c. Neither of the projects d. You cannot tell from the information presented
Suppose the government imposes a $2 per-unit tax on an item whose production creates a negative externality. Suppose the $2 is exactly the value of the external cost. If the government uses the tax revenue to clean up pollution created by this production,
a. an optimal allocation of resources has been achieved b. the market's equilibrium price is an efficient one c. no externalities exist d. there is no market failure e. it is clear that obligatory controls have worked
In Book 23 of Homer's Iliad are these words: "The winner was to acquire a fire-straddling tripod valued at twelve oxen by the Akhaians. As for the loser, in their midst Akhilleus placed a woman versatile at crafts, whose value was four oxen." What does this passage tell us about economics in the Iliad?
A. Oxen were used as the medium of exchange. B. Oxen were used as the unit of account. C. Oxen were the best way to store wealth. D. Oxen were used as legal tender.
You borrow $40,000 at an interest rate of 5% to open Organic Foods, an all-natural food store. You will earn an economic profit if the return on your investment is
A. greater than 5%. B. 10% or greater. C. between 0 and 5%. D. 5%.