If the supply curve shifts to the right, how does this affect the market for product A?
a) A higher equilibrium price and a higher equilibrium quantity.
b) A lower equilibrium price and a lower equilibrium quantity.
c) A higher equilibrium price and a lower equilibrium quantity.
d) A lower equilibrium price and a higher equilibrium quantity.
Answer: a) A higher equilibrium price and a higher equilibrium quantity.
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Adverse selection in insurance markets results in missing markets because people engage in riskier behavior once they are insured.
Answer the following statement true (T) or false (F)
Refer to Figure 2-8. What is the opportunity cost of one dozen roses?
A) 0.4 dozen orchids B) 2.5 dozen orchids C) 7.25 dozen orchids D) 16 dozen orchids
Refer to Table 4-7. If a minimum wage of $11.50 an hour is mandated, what is the quantity of labor demanded?
A) 40,000 B) 570,000 C) 610,000 D) 1,180,000
In the case of a negative externality,
A) marginal external costs are greater than marginal private costs. B) marginal external costs are less than marginal private costs. C) marginal external benefits are greater than marginal private benefits. D) marginal external benefits are equal to marginal private costs. E) none of the above