In early 2009 the price of computer memory chips rose. In a demand and supply model, shifts in what curve(s) could have brought about the higher price?
What will be an ideal response?
The higher price could have been brought about by an increase in demand, a decrease in supply, or the combination of an increase in demand combined with a decrease in supply. Hence the higher price could have been the result of a rightward shift in the demand curve, a leftward shift in the supply curve, or a combined rightward shift of the demand curve and leftward shift of the supply curve.
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As the tax wedge associated with a given economic activity gets smaller, we would expect
A) more of that economic activity to occur. B) people to engage in less of that particular activity. C) the distortions caused by taxes on that activity to be greater. D) no change in the practice of that activity until the tax wedge ultimately disappears.
Which of the following results from an increase in the price of a one-week vacation at beach resorts on the coast of Mexico?
a. An increase in the supply of bicycle tires in Toledo, Ohio. b. A decrease in the demand for vacations at resorts on Caribbean islands. c. An increase in the supply of vacation opportunities at resorts on the coast of Mexico. d. An increase in the demand for vacations at resorts on Caribbean islands.