The figure illustrates the market for chairs. If the supply of chairs increases, the price of a chair ________ $40 and the quantity ________
A) will rise above; demanded will decrease
B) will rise above; supplied will increase
C) will fall below; demanded will increase
D) will fall below; demanded will decrease
C
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When interest rates in the bond market go up
A) the price of existing bonds goes u
Operation on the basis of comparative advantages implies which of the following?
(a) Countries allocate their resources across all sectors regardless of opportunity costs. (b) Countries will specialize even if they can produce everything. (c) Countries not efficient in any production should not trade. (d) none of the above.
Due to externalities generated by home landscaping, its price
A) is above the optimal level, and quantity that is below the optimal level. B) is below the optimal level, and quantity that is above the optimal level. C) and quantity traded are both above the optimal level. D) and quantity traded are both below the optimal level. E) must fall in order for the market to reach equilibrium.
Economic regulation is government policy designed to
a. improve health and safety in products and in working conditions b. prevent firms from monopolizing or developing a cartel in existing competitive markets c. eliminate existing monopolies by breaking them apart into many smaller firms d. create monopolies by forcing competitive firms to merge e. control price and output in industries where monopoly is desirable