Exhibit 4-6 Demand and supply curves
If market supply decreases and, simultaneously, market demand increases, the new equilibrium will show:
A. market price will decrease, and market quantity exchanged will increase.
B. market price will increase, and market quantity exchanged will decrease.
C. market price will increase, and the quantity exchanged could increase, decrease, or remain the same.
D. market price could increase, decrease, or remain the same, and quantity exchanged will increase.
Answer: C
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When the competitive firm's value of the marginal product of labor intersects the market-wage level, the firm:
A. has found the profit-maximizing quantity of labor to hire. B. can increase its profits by hiring any amount greater than that point. C. should consider shutting down since it is not earning profits. D. can increase its profits by hiring any amount less than this point.
The copper, aluminum, cement, and industrial alcohol industries are examples of:
A. interproduct competition. B. homogeneous oligopoly. C. monopolistic competition. D. differentiated oligopoly.
An increase in a country's saving rate will tend to cause which of the following in the long run?
A. an increase in the unemployment rate B. an increase in the rate of inflation C. an increase in economic growth D. a reduction in per capita real GDP
We refer to the whole class of goods that firms will ________ in a completely unregulated market economy as public goods.
A. underproduce B. overproduce C. not produce at all D. Both A and C are correct.