When a surplus exists in a market, sellers
a. raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated.
b. raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.
c. lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated.
d. lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.
c
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In the above figure, Brendan originally consumes at point A. If his income rises and compact discs are a normal good but haircuts are an inferior good then he will begin consuming at a point such as
A) E. B) B. C) C. D) D.
Which of the following is an assumption used in deriving a production possibilities curve?
A) Poverty always exists in society. B) The wages in an industry increase constantly. C) Prices will continue to increase. D) The amount of resources is fixed.
By driving up interest rates, an increase in investment spending causes
a. a voluntary decrease in consumption b. a voluntary increase in consumption c. an involuntary decrease in consumption d. an involuntary increase in consumption e. government spending to be crowded out
Firm A's motive in filing an antitrust suit against Firm B may be
a. to seek court protection against genuinely unfair practices by Firm B. b. to seek financial compensation for damages caused by Firm B. c. to create an expensive nuisance for Firm B. d. All of the above are correct.