Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the equilibrium quantity of X will ________ and the equilibrium quantity of Y will ________.
A. decrease; increase
B. increase; increase
C. increase; decrease
D. decrease; decrease
Answer: C
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Barriers to entry do not occur when:
a. economies of scale in production exist in an industry. b. firms requires a professional license or franchise agreement. c. the firm that introduces a product is granted a patent. d. a firm controls a scarce resource. e. diseconomies of scale in production exist in an industry.
If the government of a country decides to increase the required reserve ratio from 10 to 12.5 percent, the value of the money multiplier will: decrease from 10 to 8. a. increase from 1.0 to 1.2. b. decrease from 10 to 8
c. increase from 10 to 12. d. decrease from 12 to 10.
After a price decrease for good X, the new consumer equilibrium level of good X will be:
A. lower than before the price change. B. indeterminate without more information. C. the same as before the price change. D. higher than before the price change.
A temporary increase in the price of oil would
A. decrease short-run aggregate supply and leave long-run aggregate supply unchanged. B. increase both short-run and long-run aggregate supply. C. increase short-run aggregate supply and decrease long-run aggregate supply. D. decrease both short-run and long-run aggregate supply.