Refer to the information provided in Figure 3.18 below to answer the question(s) that follow.
Figure 3.18Refer to Figure 3.18. The market is initially in equilibrium at Point B. If demand shifts from D2 to D1 and there is an excess supply of 200 million pounds of burritos, the price of burritos would be
A. $1.50.
B. $3.00.
C. $4.00.
D. $6.00.
Answer: C
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Which of the following statements is true?
A) If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease. B) An increase in supply causes a change in equilibrium price; the change in price does not cause a further change in demand or supply. C) If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater. D) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.
Refer to the table below. The perfectly competitive firm has a random demand with a 50 percent chance of being $5 and a 50 percent chance of being $7. What quantity should the firm produce to maximize its expected profit?
The above table summarizes the marginal cost of production at various quantity levels for a perfectly competitive firm.
A) 110
B) 120
C) 100
D) 130
The internationalization of our economy has
A. made macropolicy more important. B. made macropolicy less important. C. had little effect on the importance of macropolicy.
Suppose a recent and widely circulated medical article reports new benefits of exercise. Simultaneously, the price of the parts needed to make bikes falls. What is the likely effect on the equilibrium price and quantity of exercise bikes sold?
A. Price of exercise bikes remains the same and quantity sold increases. B. The change in price is ambiguous, but the quantity sold increases. C. Price of exercise bikes decreases and quantity sold remains the same. D. Price of exercise bikes increases and quantity sold also increases.