Consider a market that is in equilibrium. If it experiences an increase in supply, what will happen? The supply curve will shift to the:
A. right and the equilibrium price and quantity will rise.
B. right and the equilibrium price will decrease and the equilibrium quantity will increase.
C. right and the equilibrium price and quantity will fall.
D. left and the equilibrium price and quantity will fall.
B. right and the equilibrium price will decrease and the equilibrium quantity will increase.
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The U.S. current account equals
A) U.S. exports - U.S. imports - net income from foreign investments + net transfers from abroad. B) U.S. exports - U.S. imports + net income from foreign investments + net transfers from abroad. C) U.S. exports + U.S. imports + net income from foreign investments + net transfers from abroad. D) U.S. imports - U.S. exports + net income from foreign investments + net transfers from abroad.
Compared to higher-income families, low-income families would demand proportionately more of which of the following kinds of goods?
a. Luxury goods. b. Substitute goods. c. Normal goods. d. Inferior goods.
According to Adam Smith's theory of absolute advantage, who benefits from engaging in trade
What will be an ideal response?
Suppose that in a market for used cars, there are good used cars and bad used cars (lemons). Consumers are willing to pay as much as $9,000 for a good used car but only $3,000 for a lemon. Sellers of good used cars value their cars at $7,500 each and
sellers of lemons value their cars at $1,500 each. Buyers cannot tell if a used car is reliable or is a lemon. Based on this information, what is the likely outcome in the market for used cars? A) Sellers of good used cars will drop out of the market. B) Sellers of good used cars will incur losses. C) Sellers of lemons will drop out of the market. D) Used cars will sell for $6,000.