It is often observed that the prices charged for gasoline by the various gas stations in a particular city tend to move together very closely. Is this an example of tacit collusion that should be prosecuted in the United States? Why or why not? What will be an ideal response? ANSWER Many people want […]
Date: September 10th, 2020
All else constant, a large decrease in the number of people who want to own sport utility vehicles (SUVs) because of their poor fuel efficiency could be expected to cause: A) an increase in the supply of SUVs. B) a decrease in the equilibrium price of gasoline. C) an increase in the equilibrium price of […]
Date: September 10th, 2020
Assume there is a reduction in the shipments of petroleum products due to political tension in the Persian Gulf. Which of the following would not be expected to happen? A) Oil companies would “ration” their supplies of gasoline by raising price. B) There would be a shortage of the original equilibrium price. C) Quantity demanded […]
Date: September 10th, 2020
An increase in interest rates might ________ saving because more can be earned in interest income. A) encourage B) discourage C) disallow D) invalidate ANSWER A
Date: September 10th, 2020
The marginal propensity to consume plus the marginal propensity to invest equal one. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Over the past several decades, technological change has led to a significant amount of consolidation in the U.S. brewing industry. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Explain why the price elasticity of demand varies along a demand curve, even if the demand curve is linear. What will be an ideal response? ANSWER As we move down a demand curve, the percentage change in price (quantity) varies. When price is relatively high, a one unit change in price is small in […]
Date: September 10th, 2020
When measuring the actual output produced in an economy, one should focus on GDP measured in nominal terms. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
A trade deficit means: A) the country has positive net savings, which it lends abroad. B) the country has negative net savings, which it lends abroad. C) the country has positive net savings, which it borrows from abroad. D) the country has negative net savings, which it borrows from abroad. ANSWER D
Date: September 10th, 2020
Assuming there is a rise in supply of copper, if the market for copper is allowed to adjust, the ultimate result will be: A) an increase in price and an increase in the quantity demanded. B) an increase in price and an increase in the quantity supplied. C) a decrease in price and an increase […]
Date: September 10th, 2020
