Next the main employer in the town outsources a significant part of the business overseas. What will happen to Matt’s demand curve, his equilibrium price and the quantity of computers he sells? Assume that the last customer in town will now go without a computer if the price reaches $1,900 but that the customers still decline at the rate of one per $1 price increase.
Answer: By lowering the demand intercept to $1900 and setting the supply equal to demand, the new quantity is 800 and the new price is $1,100
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The data in the table above shows the consumption by families in a small (poor) economy. The families consume only salt and bread. The reference base period is 2011. The cost of the CPI market basket in 2010 is
A) $52.00. B) $5.00. C) $64.00. D) $8.50. E) unable to be calculated because information is needed about the quantities purchased in 2010.
The smallest (in terms of dollar value) component of our M1 money supply is
a. demand and other checkable deposits b. currency c. travelers' checks d. money market accounts e. savings accounts
The circular flow model shows how ______ interact in markets
a. workers and firms b. firms and households c. firms and banks d. banks and households e. households and government
Payroll tax puts a wedge between the wages firms pay and the wages workers earn due to ______.
a. which party the tax is levied against b. the inelasticity of supply relative to demand c. whether the supply or demand curve is shifted d. the fact that firms essentially pay the tax twice