The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5.If this economy is open to trade, and the world price of a car is $6,000, and the government imposes a quota allowing 3000 cars to be imported, then domestic price of the car will be ________.
A. $6,000
B. $5,000
C. $10,000
D. $8,000
Answer: D
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An assumption of the classical model is that
A) money illusion is widespread. B) people make decisions based on nominal prices rather than real prices. C) prices are flexible while wages are inflexible. D) people are motivated by self-interest.
In year 1 the CPI is 175, and in year 2 the CPI is 189. If Dennis's salary was $82,000 in year 1, what is the minimum salary he must earn in year 2 to "keep up with inflation"?
a. $83,550 b. $92,360 c. $85,750 d. $88,560
In all cases, microeconomics deals with
A) what is. B) what should be. C) relatively small units in the economy. D) the entire economy.
Refer to the graph shown. If market price is currently $7.00 per unit, this perfectly competitive firm will maximize profit by producing:
A. between 550 and 650 units of output. B. 850 units of output. C. 650 units of output. D. 450 units of output.