Use the figure below to answer the following question. 
A decrease in supply is depicted by a
A. movement from point x to point y.
B. movement from point y to point x.
C. shift from S2 to S1.
D. shift from S1 to S2.
Answer: C
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Which of the following government actions would be considered expansionary fiscal policy?
A. Balancing the federal budget B. Reducing tariffs on imports C. Passing a personal tax credit for the purchase of a new automobile D. Asking the Federal Reserve to reduce interest rates
Which of the following factors strengthens the case for policy activism?
A) flexible wages B) lack of real-business-cycles C) sticky prices D) flexible prices
Rent controls are an example of a
A) price floor. B) price ceiling. C) price floor for the consumer and a price ceiling for the producer. D) nonprice rationing device.
Suppose that you have returned from your fishing expedition with 20,000 fish. The market price is $3 per fish. Your average fixed cost was $1 and your total variable cost was $5,000 . If the price jumps to $3.50 before you sell your first fish, how much extra profit, if any, do you earn?
a. c and d. b. Extra profit is zero. c. Extra profit is enough to cover half of the fixed cost of your next trip. d. Extra profit is enough to cover all of the variable costs of your next two trips. e. Extra profit is $45,000.