Refer to the information provided in Figure 4.2 below to answer the question(s) that follow.
Figure 4.2Refer to Figure 4.2. The market is initially in equilibrium at Point A and supply shifts from S1 to S2. Which of the following statements is true?
A. There is no need for price to serve as a rationing device in this case because the new equilibrium quantity is higher than the original equilibrium quantity.
B. Price will still serve as a rationing device causing quantity demanded to fall from 11 to 8 soft pretzels.
C. The market cannot move to a new equilibrium until there is also a change in supply.
D. Price will still serve as a rationing device causing quantity supplied to rise from 8 to 11 soft pretzels.
Answer: B
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What do we mean by efficient production?
What will be an ideal response?
Government failure occurs when
a. fewer public goods are produced than private goods b. more public goods are produced than private goods c. less than the socially optimal quantity of public goods is produced d. more than the socially optimal quantity of public goods is produced e. special interests emerge in the market
The value of goods added to a firm's inventory in a certain year is treated as
a. consumption, since the goods will be sold to consumers in another period. b. intermediate goods, and so is not included in that year's GDP. c. investment, since GDP aims to measure the value of the economy's production that year. d. spending on durable goods, since the goods could not be inventoried unless they were durable.
Suppose 80% of U.S. trade is with England and the rest is with Japan. If the dollar rises by 10% against the pound and rises by 20% against the yen, what is the percentage change in the effective exchange rate of the United States?
a. -16% b. -12% c. -8% d. -4%