In the swimming pool market, supply and producer surplus both just fell. What most likely happened to cause this?
a. Price levels increased.
b. Price levels decreased.
c. A subsidy was given.
d. A tax was removed.
b. Price levels decreased.
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Refer to the scenario above. What is the price effect of the price change?
A) $1,750 B) $2,000 C) $3,750 D) $5,400
Assume that both the demand curve and the supply curve for MP3 players shift to the right but the supply curve shifts more than the demand curve. As a result
A) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease. B) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease. C) the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase. D) both the equilibrium price and quantity of MP3 players will decrease.
The AFL and CIO merged because it was thought that
A) organized labor would grow faster as a result. B) union pension funds would shrink as a result. C) strikes could be averted. D) managers would be more sympathetic to unions.