A sandwich shop lowers the price of tuna sandwiches. The shop suddenly sells more tuna sandwiches than usual. Which of the following does this change in sales show?
A. Substitution effect
B. Income effect
C. Law of demand
D. Law of supply
Ans: C. Law of demand
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The price of gasoline has risen and the quantity sold has fallen. This was likely caused by
A. a rise in the price of crude oil. B. a seasonal rise in the demand for gasoline. C. use of a new public transit system. D. the discovery of crude oil deposits in South Dakota.
If real GDP is less than potential GDP, then the money wage rate ________, and aggregate supply ________ so that the price level ________
A) rises; decreases; rises B) does not change; increases; falls C) falls; decreases; rises D) rises; increases; falls E) falls; increases; falls
In which market structure does one firm sell a good or service with no close substitutes and there is a barrier blocking the entry of new firms?
A) only monopoly B) only oligopoly C) perfect competition D) monopolistic competition E) either monopoly or oligopoly
A decrease in the discount rate ________ bank reserves and ________ the federal funds rate
A) increases; raises B) increases; lowers C) decreases; raises D) decrease; lowers