Exhibit 4-2 Supply and demand curves
Beginning from an equilibrium at point E1 in Exhibit 4-2, an increase in demand for good X, other things being equal, would move the equilibrium point to:
A. E1, no change.
B. E2.
C. E3.
D. E4.
Answer: D
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A nation will export a good if its
A) no-trade, domestic price is less than the world price B) no-trade, domestic price is equal to the world price. C) no-trade, domestic price is greater than the world price. D) no-trade, domestic quantity is less than the world quantity. E) no-trade, domestic quantity is greater than the world quantity.
The Coase theorem applies when property rights are given
A) to the victim of pollution but not to the polluter. B) to the polluter but not to the victim. C) to either the polluter or the victim. D) neither to the polluter nor to the victim.
Three possibilities have probabilities 0.5, 0.4 and 0.1 and values $10, $20, and $30 respectively. The expected value is:
a. $15 b. $16 c. $17 d. $18
The marginal tax rate has less effect on economic incentives than does the average tax rate
a. True b. False Indicate whether the statement is true or false