Refer to the information provided in Figure 3.18 below to answer the question(s) that follow.
Figure 3.18Refer to Figure 3.18 The market is initially in equilibrium at Point B. If demand shifts from D2 to D1, the equilibrium price will change from ________ and the equilibrium quantity will change from ________.
A. $4.00 to $3.00; 250 to 350
B. $4.00 to $3.00; 350 to 250
C. $3.00 to $4.00; 350 to 250
D. $3.00 to $4.00; 250 to 350
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
Assume that running in a marathon increases a person's risk of dying from almost negligible to about 1 in 50,000. If people know this risk and still choose to run marathons, economists would most likely conclude that people:
A. are irrational. B. have self-control problems. C. place no value on their lives. D. place a finite value on their lives.
Which of the following is the least efficient method of allocating import licenses by the government?
A. Resource-using application procedures B. A free lottery C. Fixed favoritism D. A competitive auction
Suppose the United States is experiencing a balance of payments deficit. To prevent the exchange rate from depreciating, the U.S. Treasury must:
A. sell foreign currency and buy dollars. B. sell dollars and buy foreign currency. C. sell both dollars and foreign currency. D. buy both dollars and foreign currency.