One reason many people make their own Hollandaise sauce rather than buy it is that
a. they can maintain control over the quality during production
b. the total cost of ingredients is the same as the price of store-bought sauce
c. firms do not make high-quality Hollandaise sauce
d. people place a high value on their time
e. firms do not produce goods that can be made at home
A
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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
Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?
a. Price will fall, and the effect on quantity is ambiguous. b. Price will rise, and the effect on quantity is ambiguous. c. Quantity will fall, and the effect on price is ambiguous. d. Quantity will rise, and the effect on price is ambiguous.
Suppose that Big-Cat and Fat-Cat are rival cat food brands, and the price of Fat-Cat is reduced. Following this price drop, is there a shortage or a surplus of Big-Cat at the old price of Big-Cat?
a. Neither, a price drop can not cause a shortage or surplus. b. Neither, equilibrium exists. c. Shortage. d. Surplus.
When firms hold excess labor, the value of the multiplier increases.
Answer the following statement true (T) or false (F)