Assume the costs of production in the U.S. auto industry are rising and, at the same time, the prices of Japanese-made autos are decreasing. What would reasonably be expected to happen to the equilibrium price and quantity of U.S.-made autos?
A) Price will increase; quantity cannot be determined.
B) Price will decrease; quantity cannot be determined.
C) Quantity will increase; price cannot be determined.
D) Quantity will decrease; price cannot be determined.
D
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The figure above shows the market for brooms. Which of the following could lead to the production of fewer than 600 brooms?
A) a monopoly B) a deadweight loss C) subsidies D) an external cost E) a big tradeoff
After a period of price stability in the 1990s, housing prices increased dramatically during 2002-2005 because
a. regulations designed to make housing more affordable increased the demand for housing and drove housing prices upward. b. regulations designed to make housing more affordable decreased the number of sub-prime loans and made home buying a safer investment. c. mortgage lending standards tightened, and therefore mortgage loans for housing were only available to buyers purchasing highly expensive homes. d. home buyers were putting more money down and requiring more return on their investment, driving housing prices up.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Refer to Scenario 19.2 below to answer the question(s) that follow.SCENARIO 19.2: An individual earning $40,000 pays $3,200 in taxes. The marginal tax rate on any income earned above $40,000 is 20%.Refer to Scenario 19.2. When this person earns $40,000, her average tax rate is
A. 8%. B. 12.5%. C. 20%. D. indeterminate from this information.