With respect to the market clearing price and the equilibrium quantity for good B, an increase in the demand for and a decrease in supply of the good definitely will
A. increase the market clearing price and the equilibrium quantity of good B.
B. increase the market clearing price of good B but have an uncertain impact on the equilibrium quantity of B.
C. decrease the market clearing price and the equilibrium quantity of good B.
D. increase the market clearing price of good B but lower the equilibrium quantity of B.
Answer: B
You might also like to view...
If government's goal is to raise tax revenue and limit efficiency loss, taxation is most effective when:
A. supply is inelastic and demand is elastic. B. demand or supply is elastic. C. demand or supply is inelastic. D. demand is inelastic and supply is elastic.
As the LM curve becomes steeper, an unexpected increase in consumer confidence
A) will cause a relatively large increase in output and relatively large increase in the interest rate. B) will cause a relatively small increase in output and relatively small increase in the interest rate. C) is more likely to cause stock prices to rise. D) is more likely to cause stock prices to fall.
In reality, the wage-gap between two countries will:
A. Always be reduced to zero through migration B. Be greater than zero because of migration costs C. Always be sufficient to cover the marginal costs of migration D. Be smaller the greater the distance between the countries
You're traveling in Ireland and are thinking about buying a new digital camera. You've decided you'd be willing to pay $125 for a new camera, but cameras in Ireland are all priced in euros. If the exchange rate is 0.85 euros per dollar, what's the
highest price in euros you'd be willing to pay for a camera? A) 105 euros B) 106.25 euros C) 110.15 euros D) 147 euros