Suppose that supply increases and demand decreases. What is the most likely effect on price and quantity?
What will be an ideal response?
The price will decrease, but quantity may increase, decrease, or stay the same.
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Suppose that the forward rate of Mexican pesos per dollar is selling flat, with both the spot and forward rates trading at 15 pesos per dollar
If the relevant interest rates for a foreign exchange speculator are 3 percent on dollars and 13 percent in pesos, a potential arbitrage operation would involve A) selling pesos in the forward market. B) buying pesos in the forward market. C) borrowing pesos now. D) All of the above.
Refer to the above table. The market quantity supplied when the price is $7 is
A) 0. B) 20. C) 29. D) 38.
If there are only a few producers of substitutes for Good X, a merger between producers of Good X and any one of them could significantly _____ for Good X
a. decrease the elasticity of demand. b. increase the elasticity of supply. c. decrease the elasticity of supply. d. increase the elasticity of demand.
Reforming tax laws to encourage saving is motivated by which of the Ten Principles of Economics from Chapter 1?
a. The cost of something is what you give up to get it (Principle 2). b. Trade can make everyone better off (Principle 5). c. Markets are usually a good way to organize economic activity (Principle 6). d. A country's standard of living depends on its ability to produce goods and services (Principle 8).