The _______ means that a higher price level leads to lower real wealth.
a. employment effect
b. interest rate effect
c. wealth effect
d. foreign price effect
c. wealth effect
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In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the final position after the curve shifts.
In which of the diagrams above would we see a shortage at the initial price after the indicated curve has shifted?
A. (1) and (4) B. (2) and (3) C. (1) and (3) D. (2) and (4)
A market in which the money of one nation is exchanged for the money of another nation is a ________.
A. foreign exchange market B. resource market C. stock market D. bond market
University studies have shown that that chickens grow 2 percent larger when a red mitten is placed in their cage and Vivaldi is played in the coop. This leads to a reduction in feed costs of $60 million a year. In the chicken market, the
A. demand curve shifts to the right. B. supply curve shifts to the right. C. price will rise. D. quantity sold will fall.
Suppose a price ceiling is currently set below the equilibrium price. Now suppose that policy makers decide to lower the price ceiling. This reduction in the price ceiling will cause which of the following to occur?
A. The surplus in the market will increase. B. The shortage in the market will decrease. C. The surplus in the market will decrease. D. The shortage in the market will increase.