Which of the following best describes what will happen to equilibrium if large numbers of people cancel cable television subscriptions in exchange for subscriptions to on-demand movies and televisions providers like Netflix and Hulu?
a. A change in tastes away from cable television causes a leftward shift in the demand curve, a decrease in the equilibrium quantity, and an increase in the equilibrium price.
b. A change in tastes away from cable television causes a rightward shift in the demand curve, a decrease in the equilibrium quantity, and a decrease in the equilibrium price.
c. A change in tastes away from cable television causes a leftward shift in the demand curve, an increase in the equilibrium quantity, and a decrease in the equilibrium price.
d. A change in tastes away from cable television causes a rightward shift in the demand curve, a decrease in the equilibrium quantity, and a decrease in the equilibrium price.
c. A change in tastes away from cable television causes a leftward shift in the demand curve, an increase in the equilibrium quantity, and a decrease in the equilibrium price.
A change in tastes away from cable television causes a leftward shift in the demand curve, an increase in the equilibrium quantity, and a decrease in the equilibrium price.
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Suppose Smith pays $100 to Jones.
a) We can say with certainty that the GDP has increased by $100. b) We can say with certainty that the GDP has increased, but we cannot determine the amount. c) We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased. d) We need more information to determine whether GDP has changed.
Donnie's Donuts incurs $450,000 per year in explicit costs and $200,000 in implicit costs. The bakery earns $800,000 in revenues and has $2 million in net worth. Based on this information, what is the economic profit for Donnie's Donuts?
A) $150,000 B) $350,000 C) $600,000 D) $1.2 million
Adam Smith's invisible hand refers to
A) the government's unobtrusive role in ensuring that the economy functions efficiently. B) property ownership laws and the rule of the court system. C) the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole. D) the laws of nature that influence economics decisions.
What is the law of demand and how do we illustrate it?
What will be an ideal response?