Refer to Figure 6.1. Assume that L1 represents the budget line before a price change. Point B represents the:
A. uncompensated effect of an increase in the price of bread.
B. uncompensated effect of a decrease in the price of soup.
C. uncompensated effect of an increase in the price of soup.
D. compensated effect of an increase in the price of soup.
C. uncompensated effect of an increase in the price of soup.
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Which of the following describes a characteristic of a perfectly competitive market?
A) Equilibrium is achieved when demand for the product sold in the market equals the supply. B) There are many buyers and sellers. C) There are many sellers but few buyers. D) There are many buyers but few sellers.
Some companies and celebrities are using a variant of pollution rights to become "carbon neutral."
a. True b. False
The reserve ratio is 10 percent. Depositors regularly keep 10 percent of their deposits as cash. If the Fed buys $1 million of U.S. government securities, excess reserves
A. increase by $810,000. B. increase by $900,000. C. increase by $800,000. D. increase by $1 million.
The long-run supply curve would be upward-sloping if:
A. Resource prices fall as industry production contracts B. Resource prices rise as industry production contracts C. Resource prices are not affected by changes in industry output-level D. Resource prices are set by the government