When demand increases and supply decreases by the same amount, the equilibrium quantity ________ and the equilibrium price ________
A) decreases; rises
B) decreases; falls
C) decreases; does not change
D) decreases; might rise, fall, or not change
E) does not change; might rise, fall, or not change
C
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Which of the following would cause a decrease in aggregate demand?
A) a rise in wages B) an increase in the money supply C) a fall in investor confidence D) an increase in the price level
A Chinese restaurant wants to expand its business by acquiring a neighboring dry cleaner. In this case,
A) eminent domain would likely be used to reduce transactions costs. B) eminent domain would likely be used to reduce the holdout problem. C) eminent domain would not likely be used. D) eminent domain would likely be used because this transaction would increase cooperative surplus.
The figure illustrates the market for hot dogs on Big Foot Island. The producer surplus is ________
A) $240 an hour B) $180 an hour C) $1.20 a hot dog D) $60 an hour
According to the adaptive rationality standard, people might choose to have unselfish preferences because:
A. they do not know how to make efficient choices. B. people sometimes make irrational choices. C. they have no other choice. D. doing so could be in their own best interest.