Assuming that the demand and supply of a good both decreased by the same amount, the new equilibrium would represent:
a. an increase in price and an increase in quantity exchanged.
b. no change in price and an increase in quantity exchanged.
c. a decrease in price and a decrease in quantity exchanged.
d. no change in price, and decrease in quantity exchanged.
d
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If Happy Feet chooses to Ad and Best Nails then chooses to Ad, Happy Feet earns ________ million in net profit and Best Nails earns ________ million.
Happy Feet wants to prevent Best Nails from entering the nail salon market. The above game tree illustrates the different strategies and corresponding payoffs for the two firms. Both Happy Feet and Best Nails have the same strategies of advertising (Ad) or not advertising (No Ad). The payoffs represent net profit in millions.
A) $4; $1
B) $1; $4
C) $5; $1
D) $2; $3
Graphically, the effects of an external cost can be shown as
A) a leftward shift of the market demand curve. B) a leftward shift of the market supply curve. C) a downward movement along the market demand curve. D) a rightward shift of the market supply curve.
"Crowding out" will ____ expansionary fiscal policy because it results in ____
a. weaken; a depreciated value of the dollar b. strengthen; reduced imports c. weaken; increased interest rates d. strengthen; increased tax revenues
Markets will underproduce goods that yield external benefits and overproduce those that generate external costs.
Answer the following statement true (T) or false (F)