An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery. The first development concerned side effects from the surgery, including blurred vision
The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges. In the market for laser eye surgeries, these two developments
A) decreased demand and increased supply resulting in an increase in both the equilibrium quantity and the equilibrium price of laser eye surgeries.
B) decreased demand and increased supply, resulting in a decrease in both the equilibrium price and the equilibrium quantity of laser eye surgeries.
C) decreased demand and decreased supply, resulting in a decrease in the equilibrium quantity and an increase in the equilibrium price of laser eye surgeries.
D) decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries.
D
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When the economy is in recession, does the Fed want to raise the federal funds rate so as to increase aggregate demand and increase real GDP? Explain your answer
What will be an ideal response?
IBM and Sara Lee are two of the biggest firms in the United States, but they produce different products. Could they legally merge, or would their merger be struck down by the courts?
Marginal revenue is defined as the
a. total revenue minus total cost b. change in total revenue divided by the change in the quantity of output c. price minus average total cost d. total revenue over the quantity of output e. quantity times price
Assume the economy faces high unemployment but stable prices. Which combination of government policies is most likely to reduce unemployment?
a. The purchase of government securities in the open market and an increase in taxes b. The sale of government securities in the open market and a decrease in taxes c. The sale of government securities in the open market and a decrease in government spending d. The purchase of government securities in the open market and an increase in government spending