Suppose your economics professor earns an equal annual salary of $40,000. The professor loves teaching and would not quit her job if her pay were reduced to $15,000 per year. Your professor is earning annual economic rent of

Suppose supply decreases, but there is no change in demand. As the market reaches its new equilibrium:

A. excess demand will lead the price to fall. B. excess supply will lead the price to rise. C. excess supply will lead the price to fall. D. excess demand will lead the price to rise.

Suppose you are choosing between milk and cookies. If the opportunity cost of cookies in terms of milk increases, then the budget curve will

A. shift outward. B. rotate outward. C. rotate inward. D. shift inward.