Which of the following increases the quantity supplied of compact discs but does NOT increase the supply of compact discs?
A) new technology that lowers the cost of producing compact discs
B) a decrease in the price of a compact disc
C) an increase in the price of a compact disc
D) a decrease in the number of suppliers of compact discs
E) an increase in the price of the resources used to produce compact discs
C
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Suppose the market clearing price for apples rises from $2.00 to $3.00 per pound, and the overall market clearing output decreases from 1 million to 1/2 million pounds. How can we explain the increase in price and decrease in market output?
A) Supply decreased and demand remained unchanged. B) Supply increased and demand remained unchanged. C) Demand increased and supply remained unchanged. D) Demand decreased and supply remained unchanged.
The income elasticity of demand for bicycles is +10, which implies that bicycles are
A) an inferior good. B) a normal good. C) a substitute good for motorbikes. D) a complement good for motorbikes.
In a fixed exchange rate regime, which of the following policies could lead to a greater trade deficit and leave aggregate demand constant?
A) Devalue the currency. B) Increase government spending. C) Decrease government spending. D) Decrease government spending and devalue the currency. E) Increase government spending and revalue the currency.
Which of the following is most likely to reduce the rate of economic growth?
A. slow technological progress B. investment in human capital C. a high domestic saving rate D. subsidies for R&D activities