Two events occur simultaneously in the market for automobiles: (1) an improvement in assembly line technology and (2) the economy enters a recession (which decreases consumers' income). An economist would predict with certainty that
a. equilibrium quantity will rise
b. equilibrium quantity will fall
c. equilibrium price will rise
d. equilibrium price will fall
e. the equilibrium price will remain the same
D
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An optimal two-part tariff pricing schedule maximizes consumer surplus
Indicate whether the statement is true or false
In order to continue its operations, in the long-run a firm must
a. Charge a price that is equal to its AVC b. Charge a price that is equal to its AFC c. Charge a price that is equal to its AVC + AFC d. Need more information to determine the price
If the consumption function shifts downward, which of the following is the most likely cause?
a. Consumers become more optimistic. b. The price level increased. c. Consumers' incomes increase. d. Real interest rates decrease.
Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and current international transactions balance in the context of the Three-Sector-Model? a. The GDP Price Index falls and current international transactions
balance becomes more positive (or less negative). b. The GDP Price Index rises and current international transactions balance becomes more negative (or less positive). c. The GDP Price Index and current international transactions balance remain the same. d. The GDP Price Index rises and current international transactions balance remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.