If there was an increase in the excise tax imposed on guitar suppliers, what would be the effect on the equilibrium price and quantity of guitars?
a. Price increases; quantity decreases
b. Price decreases; quantity decreases
c. Price increases; quantity increases
d. Price decreases; quantity increases
A
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Which of the following variables will shift the classical aggregate demand curve?
a. An increase in government spending b. A decrease in taxes c. An increase in autonomous investment expenditures d. An increase in the money stock e. All of the above
If a country is currently producing inside its production possibilities curve
A) it can increase the production of both goods by putting unemployed resources to work. B) it can increase the production of one of the goods only if it reduces the production of the other good. C) it is experiencing efficient production of one good but not the other. D) None of the above are correct.
A reduction in an input price will cause a change in quantity supplied but not a change in supply
a. True b. False Indicate whether the statement is true or false
In a perfectly competitive market,
A. all firms produce and sell a standardized or undifferentiated product. B. firms are price-setters. C. the output sold by a particular firm may be quite different from the output sold by the other firms in the market. D. it is difficult for new firms to enter the market due to barriers to entry.