Exhibit 4-2 Supply and demand curves
The market shown in Exhibit 4-2 is initially in equilibrium at E1. Changes in market conditions result in a new equilibrium at E2. This change is stated as a(n):
A. increase in supply and an increase in quantity demanded.
B. increase in supply and a decrease in demand.
C. decrease in supply and a decrease in quantity demanded.
D. increase in demand and an increase in supply.
Answer: A
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Two studies published in the New England Journal of Medicine link the risk of breast cancer to alcohol consumption. Young women who have nine drinks per week were reportedly 150 percent more likely to develop breast cancer. Considering the market for alcohol, an economist would predict a movement
A. up the demand curve as quantity demanded falls. B. up the supply curve as the demand curve shifts. C. down the supply curve as the demand curve shifts. D. down the demand curve as quantity falls.
U.S. investment is financed from
A) private saving, government budget surpluses, and borrowing from the rest of the world. B) private saving, government budget deficits, and borrowing from the rest of the world. C) private borrowing, government budget deficits, and lending to the rest of the world. D) private saving and borrowing from the rest of the world only.
In order to determine if a hypothesis is valid we must utilize a. qualitative analysis. b. empirical analysis
c. marginal analysis. d. average analysis.
If the short run elasticity of demand for widgets is 0.7 and the long run elasticity of demand for widgets is 1.5, a decrease in price will ____ total revenue in the short run and ____ total revenue in the long run. a. Increase; increase
b. Increase; decrease. c. Decrease; increase. d. Decrease; decrease.