Assume the market for pencils is competitive and originally in equilibrium. As a result of an increase in the price of graphite, the supply of pencils decreases. What is true of the new equilibrium?
A. The price is lower while the quantity exchanged increases.
B. The price is lower and the quantity exchanged decreases.
C. The price is higher and the quantity exchanged increases.
D. The price is higher while the quantity exchanged decreases.
Answer: D
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Answer the following statements true (T) or false (F)
1. The simple immigration model suggests that labor migration raises the wage rate in the country of origin while reducing the wage rate in the host country. 2. Remittances by Mexican workers in the United States to their families in Mexico tend to reduce the gains from immigration to the United States and increase it for Mexico. 3. Much of the recent concerns about immigration in the U.S. have focused on green-card holders. 4. The arguments that illegal immigrants do not take away jobs from legal residents, or that illegal immigrants displace legal residents from jobs on a one-to-one basis are both false. 5. At the heart of U.S. immigration laws are immigration quotas. 6. Economic analysis suggests that immigration can either benefit or harm a nation, depending on the number of immigrants, their education, skills, work ethic and the rate at which they are absorbed into the economy.
In the circular flow model, profits are considered to be
A) a cost of doing business. B) equal to zero, or else the circular flow would be out of balance. C) a subtraction from the Gross Domestic Product (GDP). D) a form of interest payment.
The U.S. economy of the mid 1980s through 2007 is typically referred to as ________
A) "The Great Depression" B) "The Great Inflation" C) "The Great Moderation" D) all of the above E) none of the above
Suppose that equilibrium in the dollar-pound market occurs where 300 million pounds are demanded at a price of $1.75 per pound. If the current exchange rate is $1.60 per pound, we know that
a. the dollar-pound market is in equilibrium b. there is an excess demand for pounds, so the dollar price of the pound will rise c. there is an excess demand for pounds, and the pound is overvalued d. there is an excess supply of pounds, and the dollar price of the pound will rise e. there is an excess supply of pounds, and the dollar price of the pound will fall