There is a technological advance in the production of a good and simultaneously also an increase in the expected future price. Which of the following will happen?
A) The equilibrium price will rise because the supply curve shifts rightward.
B) The equilibrium price falls because the supply curve shifts leftward.
C) The technological improvement shifts the supply curve rightward while the increase in the expected future price shifts the supply curve leftward. The net effect is not known.
D) The demand curve shifts rightward and the supply curve does not shift.
C
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John wants to buy a new lawn mower. He can either buy it in the US and pay $500 or buy it in Mexico and pay 8188 Mexican Pesos. At the exchange rate of 1 Mexican Peso=0.771US$, ignoring any other costs, he would
a. Prefer buying in the US b. Prefer buying in Mexico c. Be indifferent about where he buys his television d. None of the above
In the perfectly competitive market, all firms in the market are assumed to be producing:
a. identical products. b. differentiated products. c. products that are heavily advertised. d. complementary products.