Suppose that the average equilibrium monthly rental price of apartments and rooms in a college town had been steady at $600, but then the college expanded enrollment from 10,000 to 12,000, and suddenly there was a shortage of rental housing at the prevailing price of $600 . Which of the following is most likely to be true?
a. The shortage occurred because supply increased, and a new market equilibrium will feature lower rental prices and fewer rental units available on the market.
b. The shortage occurred because demand increased, and a new market equilibrium will feature higher rental prices and fewer rental units available on the market.
c. The shortage occurred because demand decreased, and a new market equilibrium will feature lower rental prices and fewer rental units available on the market.
d. The shortage occurred because demand increased, and a new market equilibrium will feature higher rental prices and more rental units available on the market.
d
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The "new economy" that emerged in the mid-1990s is based on
A) manufacturing. B) information technology. C) financial services. D) retail sales.
All else constant, all of the following would cause the demand curve for a good to shift except:
A) a change in the cost of producing the good. B) a change in the price of a related good. C) a change in consumer's incomes. D) a change in the number of buyers.
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Suppose that a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has an absolute advantage in:
A. the production of bananas, but not tomatoes. B. the production of both bananas and tomatoes. C. the production of tomatoes, but not bananas. D. neither good.
The Great Depression was characterized by:
A. unemployment exceeding 25 percent. B. the Roaring Twenties. C. accelerated economic growth. D. firms rapidly expanding their borrowing rates.