Assume that supply increases greatly and demand increases slightly. Which of the following will happen?
a. Equilibrium price will fall and equilibrium quantity will rise.
b. Equilibrium price will rise and equilibrium quantity will fall.
c. Equilibrium price will rise and equilibrium quantity will rise.
d. Equilibrium price will fall and equilibrium quantity will fall.
e. Neither equilibrium price nor equilibrium quantity will change.
A
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When expansionary monetary policy pushes real interest rates to an artificial low, the Austrian view of the business cycle predicts this will lead to
a. an increase in aggregate demand and a lengthy expansion in real output. b. a recession, followed by a strong and lengthy expansion in real output. c. malinvestment during an economic boom, followed by a recession. d. malinvestment during a temporary recession, followed by a strong and lengthy economic boom.
Jacqueline, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top ten universities in her field. What type of unemployment is she experiencing?
What will be an ideal response?
Markets allocate resources efficiently when Adam Smith's "invisible hand" is allowed to work freely. Which of the following statements is true?
a. Unrestrained, competitive markets can accomplish optimal resource allocation through the invisible hand - the competitive price system. b. Mandatory controls that lower prices below equilibrium improve economic welfare by making the product cheaper and promote the efficient use of resources. c. The "visible hand" of government planners provides transparency to markets and thus improves outcomes. d. Increased competition from medical travel, domestic or international, does harm to patients who do not have the ability to travel for care. e. Government regulation is essential for market outcomes to maximize consumer welfare.
Which is of the following is one difficulty economists face that some other scientists do not?
a) Unlike other sciences, economic studies must include the largest economic player, the government. b) Economists unfortunately receive less government funding than other scientists. c) Corporations are reluctant to disclose necessary information for economic research. d) Experiments are often difficult to conduct in economics.