Following the sharp increases in oil prices in the United States caused by the OPEC oil embargo of 1973–1974, U.S. automakers started building smaller, more fuel-efficient cars. This development caused the
A. demand curve for oil to shift out.
B. demand curve for oil to shift in.
C. supply curve of oil to shift out.
D. supply curve of oil to shift in.
Answer: B
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Use the figure below to answer the following question.
The figure above shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S3?
A. a tax on wheat production B. a decrease in the price of wheat C. an increase in the price of wheat D. a subsidy for wheat production
Candy makers accurately anticipate the increase in demand for candy for Halloween so that the supply of candy and demand for candy increase the same amount. As a result, the price of candy ________ and the quantity of candy ________
A) rises; does not change B) falls; increases C) does not change; increases D) does not change; does not change E) rises; increases
A share of stock expected to pay an annual dividend of $10 forever has a market price of __________ when the Treasury bond rate is 6% and the stock has a risk premium of 4%
A) $100.00 B) $166.67 C) $250.00 D) $500.00
If there are both external benefits and external costs associated with the production and consumption of a good, and the external benefits are greater than the external costs,
a. Taxing it could bring us closer to the efficient solution b. Subsidizing it could bring us closer to the efficient solution c. Neither a tax or a subsidy could bring us closer to the efficient solution d. None of the above is true.