In order to increase the supply of a good, producers must
A) convince consumers to reduce the quantity demanded.
B) see an increase in quantity supplied by competitors.
C) reduce their per-unit costs of producing the good.
D) cut back on labor to reduce production costs.
Answer: C
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Which of the following is an example of the effect of a price floor?
A. Scalping of Super Bowl tickets B. Surplus cheese C. The New York city housing shortage D. Black markets E. Milk shortages
If Sean thinks that the choice between going to Olive Garden or Red Lobster is simply too confusing, a behavioral economist will explain that Sean is showing ________
A) the endowment effect B) bounded rationality C) bounded self-interest D) bounded will power
Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. How much does Alice produce in the Nash equilibrium?
A. 2,000 B. 1,333.33 C. 800 D. 4,000
Which of the following best describes how recessions are illustrated in the AD/AS diagram?
a. Recessions are illustrated in the AD/AS diagram when the equilibrium level of real GDP is substantially above potential GDP, while in years of resurgent economic growth the equilibrium will typically be close to potential GDP. b. Recessions are illustrated in the AD/AS diagram when the equilibrium level of real GDP is substantially below potential GDP, while in years of resurgent economic growth the equilibrium will typically be above potential GDP. c. Recessions are illustrated in the AD/AS diagram when the equilibrium level of real GDP is substantially below potential GDP, while in years of resurgent economic growth the equilibrium will typically be close to potential GDP. d. Recessions are illustrated in the AD/AS diagram when the equilibrium level of real GDP is substantially above potential GDP, while in years of resurgent economic growth the equilibrium will typically be below potential GDP.