Assume there is an improvement in the technology used to produce Blu-ray disc players. What could be expected to happen to the equilibrium price and quantity in the market for Blu-ray disc players? A) Equilibrium price would increase and equilibrium quantity would decrease. B) Equilibrium price and quantity would both decrease. C) Equilibrium price would […]
As the price of milk increases, what happens at the original equilibrium in the market for cereal that signals market participants that the original equilibrium must change? (Milk and cereal are complements.) A) A surplus is created by an increase in supply. B) A surplus is created by a decrease in demand. C) A shortage […]
Financial markets promote greater economic efficiency by channeling funds from ________ to ________. A) investors; savers B) borrowers; savers C) savers; borrowers D) savers; lenders ANSWER C
Financial markets promote economic efficiency by A) channeling funds from investors to savers. B) creating inflation. C) channeling funds from savers to investors. D) reducing investment. ANSWER C
OPEC has had a sustained effect on the price of oil since it was first founded in 1960. Indicate whether the statement is true or false ANSWER FALSE
In January 2001, the euro/dollar exchange rate was 1.10, and in January 2002, the euro/dollar exchange rate was 1.120 What happened to the exchange rate during this period? A) Euro appreciated against the dollar. B) Euro depreciated against the dollar. C) Dollar appreciated against the euro. D) Both B and C. ANSWER D
Decrease in personal income taxes will ________ the expenditure curve: A) decrease. B) increase. C) not change. D) none of the above. ANSWER B
Assume the income of consumers of good X (a normal good) increases. What occurs at the initial equilibrium price for X that signals market participants that the equilibrium price must change? A) A surplus is created by an increase in supply. B) A surplus is created by a decrease in demand. C) A shortage is […]
Based on empirical evidence, the “farm problem” that has confronted U.S. policymakers for many years is attributable, in large part, to the relatively inelastic demand for many agricultural products. Indicate whether the statement is true or false ANSWER TRUE
In February 2002, the euro/dollar exchange rate was 1.20, and in May 2002, the euro/dollar exchange rate was 1.10. What happened to the exchange rate during this period? A) Euro appreciated against the dollar. B) Euro depreciated against the dollar. C) Dollar appreciated against the euro. D) Both B and C. ANSWER A
