Which of the following statements is true?
A) If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease.
B) An increase in supply causes a change in equilibrium price; the change in price does not cause a further change in demand or supply.
C) If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.
D) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.
B
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If a technological change reduced the amount of the variable input needed by a firm to produce a unit of output:
a. its AVC curve would shift down. b. its ATC curve would shift down. c. its MC curve would shift down. d. All of the above would occur.
Over long periods of time, labor productivity growth rates must differ by at least ____ percent to yield significant differences in standards of living
a. 1 b. 5 c. 10 d. 15
How would a decrease in the price of the feed grains used to feed cattle affect the market for beef?
a. The demand for beef would increase, increasing beef prices. b. The demand for beef would decrease, decreasing beef prices. c. The supply of beef would increase, decreasing beef prices. d. The supply of beef would decrease, increasing beef prices.
Suppose that unemployment increased last year in the United States by 5 percent. Which of the following questions would a positive analysis answer?
a. Should minimum wage be decreased to encourage employers to hire more? b. How should hiring practices change to deal with this problem? c. Will the causes of the unemployment continue to affect the economy? d. Should the government expand its welfare program?