In a recession, demand for cars falls, and the demand curve in the market for cars
A. shifts to the right.
B. shifts to the left.
C. remains unchanged.
D. slows down.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
The BLS has recently made explicit adjustments in its CPI calculations to control for
A. food safety quality issues. B. purchase location adjustments. C. issues relating to the frequency of market basket updates. D. substitution between goods.
Suppose there has been an increase in supply and a decrease in demand. In which of the following cases would the equilibrium quantity be indeterminate?
a. The supply curve shifts a measurable amount to the right. b. The demand curve shifts a measurable amount to the left. c. The relative size of the shifts in the two curves is unknown. d. The relative size of the shifts in the two curves is equal.
Under which of the following conditions would a profit-maximizing monopolist necessarily raise price?
A. If product demand was price-inelastic B. If marginal revenue was greater than marginal cost. C. If product demand was price-elastic. D. If marginal cost was greater than marginal revenue.