What happens to the equilibrium price and quantity in the market for science fiction novels, a normal good, when income increases and a new technology is invented, making it easier to publish books.
a. Quantity and price both increase.
b. Quantity and price both decrease.
c. Quantity will increase and the price change is ambiguous.
d. Price will decrease but the quantity change is ambiguous.
c. Quantity will increase and the price change is ambiguous.
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Which of the following factors could start a demand-pull inflation?
A) an increase in the money wage rate B) an increase in tax rates C) a decrease in the money wage rate D) a decrease in government expenditure E) an increase in the quantity of money
If the interest rate is below the equilibrium, which of the following occurs in this market?
a. excess supply b. excess quantity supplied c. excess demand d. excess quantity demanded
Describe who benefits and who loses from tariffs and from quotas. What is the major difference between the effects of a quota and the effects of a tariff?
As additional consumers obtain the benefits of a pure public good, such as national defense, the benefits to the existing consumers will:
A. stay the same. B. increase in the short run, but decrease in the long run. C. decrease. D. increase.