Which of the following will definitely occur when there is a decrease in demand for and an increase in supply of potato chips?
A. an increase in equilibrium quantity
B. a decrease in equilibrium quantity
C. a decrease in equilibrium price
D. an increase in equilibrium price
Answer: C
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In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.Consumers expect that the price of X will rise sharply in the future. At the same time, technology used in producing X improves. When both of these occur, what outcome will occur with greatest certainty?
A. increase D, increase S, increase P, and increase Q. B. increase D, decrease S, increase P, and effect on Q uncertain. C. increase D, increase S, decrease P, and increase Q. D. increase D, increase S, increase Q, and effect on P uncertain.
Suppose the economy is in equilibrium when there is a change in environmental policy that bans all pesticides and herbicides on farmland. We would expect to observe
A. a decrease in aggregate supply and an increase in aggregate demand. B. a decrease in both real output and the natural rate of unemployment. C. a decrease in real output and an increase in the price level. D. a decrease in real output and an increase in the natural rate of unemployment.
Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. If MR = $5, then a profit-maximizing firm will produce ________ units and earn ________.
A. 0; negative profits B. 12; positive profits C. 10; negative profits D. 5; zero profits
Refer to the given figure and assumptions. Assume initially that government does not effectively block illegal immigration. If the government then finds a way to prevent all illegal immigrants from working in this labor market:
Assumptions: (1) Employers in this market are willing and able to ignore minimum wage laws;
(2) S d represents the supply of domestic-born (and legal immigrant) workers; (3) S t represents
the total supply of workers in this labor market (S d plus illegal immigrants); and (4) unless
otherwise stated, illegal immigration is not effectively blocked by the government.
A. 10,000 domestic-born workers will gain employment at the expense of 20,000 illegal
immigrants.
B. 20,000 domestic-born workers will gain employment at the expense of 20,000 illegal
immigrants.
C. 10,000 domestic-born workers will gain employment at the expense of 70,000 illegal
immigrants.
D. 10,000 domestic-born workers will gain employment at the expense of 50,000 illegal
immigrants.