Suppose a recent and widely circulated medical article reports new benefits of exercise. Simultaneously, the price of the parts needed to make bikes falls. What is the likely effect on the equilibrium price and quantity of exercise bikes sold?
A. Price of exercise bikes remains the same and quantity sold increases.
B. The change in price is ambiguous, but the quantity sold increases.
C. Price of exercise bikes decreases and quantity sold remains the same.
D. Price of exercise bikes increases and quantity sold also increases.
Answer: B
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In early 2009 the price of computer memory chips rose. In a demand and supply model, shifts in what curve(s) could have brought about the higher price?
What will be an ideal response?
If the purchasing power of a dollar is less than the purchasing power of the Mexican peso, purchasing power parity would predict that
A) in the short run, the dollar will appreciate relative to the peso to equalize the purchasing power of the dollar and the peso. B) in the short run, the dollar will depreciate relative to the peso to equalize the purchasing power of the dollar and the peso. C) in the long run, the dollar will appreciate relative to the peso to equalize the purchasing power of the dollar and the peso. D) in the long run, the dollar will depreciate relative to the peso to equalize the purchasing power of the dollar and the peso.
On the contract curve the ______ for both consumers are the same
Fill in the blank(s) with the appropriate word(s).
Which of the following is a microeconomic concern?
A) the rate of economic growth in the United States B) the current unemployment rate in the United States C) consumer behavior D) national output of the United States