Suppose there is a decrease in both the demand for and supply of a good. What happens to equilibrium price and quantity?
A. Equilibrium quantity increases, but the effect on equilibrium price is ambiguous.
B. Equilibrium quantity decreases, but the effect on equilibrium price is ambiguous.
C. Equilibrium price increases, but the effect on equilibrium quantity is ambiguous.
D. Equilibrium price decreases, but the effect on equilibrium quantity is ambiguous.
B. Equilibrium quantity decreases, but the effect on equilibrium price is ambiguous.
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If a good sells for $10 domestically and the same good sells for $7 abroad, then this firm is engaging in
A) marginal cost selling. B) price discrimination. C) price differentiation. D) dumping.
How do participants in an auction respond to the problem of the "winner's curse"?
a. They bid more aggressively to win the auction and avoid the "curse". b. They exit the auction because winning can only be a bad sign of the object's worth. c. All bid less aggressively, so that the winner ends up not regretting having won. d. The winner regrets having won the auction.
Which of the following best describes a stock rather than a flow? a. Each week, you save $100
b. Each week, you buy $10 worth of gasoline. c. Each week, you buy $50 worth of groceries d. You earn $500 per week at your job. e. You own $5,000 worth of government bonds.
Refer to the accompanying table. If the price of Good A is $5 and the price of Good B is $4, then the rational spending rule is satisfied when the consumer purchases ________ units of Good A and ________ units of Good B.UnitsMarginal Utilityof Good AMarginal Utilityof Good B1304022733315244814
A. 4; 2 B. 3; 3 C. 3; 2 D. 1; 3