In general, a fine on buying a product leads to the
A) supply curve shifting rightward.
B) supply curve shifting leftward.
C) demand curve shifting rightward.
D) demand curve shifting leftward.
D
You might also like to view...
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Last year, the price of heating oil was $4 per gallon, and Jonetta purchased 100 gallons of heating oil. This year, the price of heating oil falls to $3 per gallon while Jonetta's income is unchanged. Jonetta decides to share her good fortune by giving her retired father a gift of $100. Consider an indifference curve-budget line diagram with heating oil on the horizontal axis and "all other goods" on the vertical axis.
(i) Does the price change make Jonetta's budget line flatter or steeper? Justify your choice. (ii) After Jonetta gives the $100 gift, will her new budget line lie above, lie below, or pass through her initial optimum? Justify your choice. (iii) Sketch an indifference curve-budget line diagram that illustrates this situation. This year, will Jonetta be better or worse off than she was last year?
If the price of insulin is currently above the market-clearing level, then
A) there is a shortage of insulin. B) the market for insulin is fully coordinated. C) there is a surplus of insulin. D) insulin is no longer a scarce good.
In the long-run equilibrium, perfectly competitive firms make zero economic profit because of
A) government regulations. B) the ability of firms to enter and exit. C) inefficient production processes. D) high fixed costs.