Buyers in the market for used guitars are getting more pessimistic about the possibility of getting a good guitar. This will cause the price of used guitars to ________ and the percentage of good used guitars to ________.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
Answer: D
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When the long-run average cost curve is downward sloping,
A) economies of scale are present. B) diseconomies of scale are present. C) the firm experiences constant returns to scale. D) the average fixed cost curve must be upward sloping. E) The premise of the question is wrong because long-run average cost curves never slope downward.
Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her marginal utility from movies will ________ and her marginal utility from books will ________
A) decrease; decrease B) increase; decrease C) decrease; increase D) increase; increase
In surveying their alumni, State U's economics department discovered that ramen noodle consumption declined once students graduated and found jobs. One conclusion the survey team might draw from this result is that:
A. ramen noodles are an inferior good. B. college graduates have a high reservation price for ramen noodles. C. there is excess demand for ramen noodles. D. the equilibrium price for ramen noodles is too high.
A rule of thumb is that a 1% increase in output leads automatically to a reduction in the deficit of what percentage of GDP?
A) 0.5% B) 1% C) 1.5% D) 2%