Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?
a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d. None of the above is correct.
b
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The phrase "smart for one, but dumb for all" refers to the idea that the individual pursuit of self-interest:
A. never leads to an efficient outcome. B. doesn't always lead to an efficient outcome. C. always leads to an efficient outcome. D. only leads to an efficient outcome when everyone is well-informed.
The market structure in which strategic considerations are most important is
A) monopolistic competition. B) oligopoly. C) pure competition. D) pure monopoly.
As a result of the financial crisis of 2007-2009, the size of the shadow banking system:
A) became smaller than the commercial banking system B) became larger than the commercial banking system C) declined, but remained larger than the commercial banking system D) increased, but remained smaller than the commercial banking system
Some countries have negative nominal interest rates. Which of the following statements about this situation is not true?
A) A saver or lender will get back less than the amount she invested. B) This is mostly a result of deliberate central bank policies. C) Consumers are expected to save more and consume less. D) Consumers are expected to borrow more and spend more.