Suppose the market for "soda X" is in equilibrium. If the FDA announced today that this soda has been proven to cause a fatal disease, what would be most likely to happen to the equilibrium price and equilibrium quantity of soda X?
a. price increases and quantity increases
b. price decreases and quantity increases
c. price increases and quantity increases
d. price decreases and quantity decreases
e. no change in price and quantity
D
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Suppose the domestic market demand function in a certain market where Q is measured in thousands of units is Qd = 20 - 2.5P, and the domestic market supply function is Qs = 2.5P - 7.5. Suppose further that the world price for the good in question is $3.40 per unit. If the government places a $1.20 tariff on imported units of this good, by how much is producer surplus increased?
A. $3,200 B. $3,600 C. $5,400 D. $3,000
The federal budget surplus recorded in 1998 resulted from a(n): a. decrease in taxes and rapid growth in federal outlays. b. increase in taxes and sluggish growth in federal outlays. c. decrease in taxes and a decrease in federal outlays
d. increase in federal outlays and taxes. e. increase in export earnings and decrease in import bills.
A product's price elasticity of demand is equal to: a. the percentage change in its quantity demanded divided by the percentage change in its price. b. the percentage change in its price divided by the percentage change in its quantity demanded. c. the average change in its quantity demanded by the average change in its price
d. the average change in its price divided by the average change in its quantity demanded.
Which of the following is NOT an organizational theory?
a. classical organization b. mechanistic c. system d. assembly