Suppose demand increases and supply decreases. Which of the following will happen?
What will be an ideal response?
Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase.
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When grocery stores offer discount coupons on Sunday papers, it is trying to
a. Price discriminate b. Undercut its competition c. Reward the frequent readers d. Provide a social service
If the government wants to raise tax revenue and shift most of the tax burden to the consumers, it would impose a tax on a good with a:
a. flat (elastic) demand curve and a steep (inelastic) supply curve. b. steep (inelastic) demand curve and a flat (elastic) supply curve. c. steep (inelastic) demand curve and steep (inelastic) demand curve. d. flat (elastic) demand curve and a flat (elastic) supply curve.
Which of the following lists contains, in this order, natural resources, human capital, and physical capital?
a. For a restaurant: the land the restaurant was built on, the money it borrowed to buy supplies, the freezers where the chops and steaks are kept. b. For a furniture company: wood, the skills and knowledge of its workers, saws. c. For a railroad: fuel, railroad engines, railroad tracks. d. None of the above is correct.
The decision-making process followed by consumers to maximize utility assumes that
A. consumers have unlimited incomes. B. consumers behave rationally, attempting to maximize their satisfaction. C. consumers are unable to rank their preferences. D. consumers do not know how much marginal utility they obtain from consuming additional units of various products.