Exam 1 Homework Problems

Your savings account pays 6%per​ year: Each​ $100 in the bank grows to ​$106 over a​ one-year period. If prices increase by 5% per​ year, by keeping​ $100 in the bank for a year you actually gain ​$_____

$1 Since prices increase by 5​% per​ year, what could be purchased today for a​ $100 will cost ​$105 a year from now.

Suppose you currently live and work in​ Cleveland, earning a salary of ​$65,000 per year and spending ​$20,000 for housing. You just heard that you will be transferred to a city in California where housing is 50% more expensive. In negotiating a new​ salary, your objective is to keep your real income constant. Your new target salary is ​$______

$75,000 Your salary needs to increase by the dollar value of the percentage increase for housing.

The Cost of a Flower Business. Jen left a job paying ​$50,000 per year to start her own florist shop in a building she owns. The market value of the building is ​$80,000. She pays ​$35,000 per year for flowers and other​ supplies, and has a bank account that pays 6% interest. What is the economic cost of​ Jen's business?

$89,800 $50,000 + $35,000 + (80,000 x .06)= $89,800 The economic​ cost, or total opportunity​ cost, of​ Jen's business includes all the costs of operating the​ business: These include forgone income​ (from the job she​ left), cost of supplies and​ inventory, and the forgone interest income​ (from the​ building). If she sold the building and put the proceeds in the​ bank, she would earn 6%interest, or $80,000 times×6% ​= ​$4,800 dollars of interest per year.

Approximately ________ percent of job losses in the first three months of 2004 were caused by outsourcing.

2%

If she added a third​ worker, holding the number of copiers​ fixed, her output would increase by fewer than____ pages.

300 pages Xena reached the point of diminishing marginal returns with the first worker. After​ that, each additional worker increases​ output, but at a decreasing rate.

A change in demand causes a ___________ the demand curve. A change in quantity demanded causes a ______________ the demand curve.

A change in demand causes a shift of the demand curve. A change in quantity demanded causes a movement along the demand curve.

A change in price causes movement along a supply curve and a change in____________________ .

A change in price causes movement along a supply curve and a change in the quantity supplied . A movement along a single supply curve is called a change in quantity supplied. This is a change in the quantity a producer is willing and able to sell when the price changes. A change in supply is caused by changes in a variable other than the price of the good and shifts the entire supply curve.

Marty and Terry run a landscaping firm that cuts lawns and prunes trees. Marty is more productive than TerryTerry at both tasks. Martyshould cut lawns and Terryshould prune trees if Marty has a__________ in cutting lawns.

A comparative advantage Marty and Terry can be more productive when each one specializes. It is sensible for a person to produce the product for which he or she has a comparative​ advantage, that​ is, a lower opportunity cost than another person.

A decrease in the market interest rate________ the economic cost of holding a​ $500 collectible for a year.

A decrease in the market interest rate decreases the economic cost of holding a​ $500 collectible for a year. Part of the economic cost of the collectible is the interest that could be earned from selling it and putting the money in the bank. A lower interest rate decreases the economic cost of holding onto the item.

Consider a transaction in which a consumer buys a book for ​$8. The value of the book to the buyer is at least ​$______, and the cost of producing the book is no more than ​$___ ​(enter an integer value​).

A person will not voluntarily buy the book unless the value to him or her is at least as great as the purchase price. The merchant will sell the book as long as the cost of producing it is no greater than the price.

Suppose the United States eliminates steel tariffs. How does the change in steel import restrictions affect automobile manufacturers who use steel as an​ input? A. The automobile industry will experience job growth as manufacturers are less likely to relocate to other countries. B. Automobile manufacturers will become lessless profitable as the price of steel fallsfalls. C. The tariff change will prompt automobile manufacturers to raiseraise the price of vehicles. D. The cost of producing automobiles will increaseincrease.

A. The automobile industry will experience job growth as manufacturers are less likely to relocate to other countries.

Continental Airlines Goes Marginal. In the​ 1960s, Continental Airlines puzzled observers of the airline industry and dismayed its stockholders by running flights with up to half the seats empty. The average cost of running a flight was​ $4,000, a figure that includes fixed costs such as airport fees and the cost of running the reservation system. A​ half-full aircraft generated only​ $3,100 of revenue. Continental ran​ half-empty flights because A. the marginal benefit was greater than the marginal cost. B. the marginal cost of adding more flights was increasing. C. the average cost would be higher with full flights. D. they own the reservation system so they pay themselves for that.

A. the marginal benefit was greater than the marginal cost. Since the given costs are​ fixed, they do not change when passengers are added. An additional passenger does not add any cost. As long as another passenger buys a​ ticket, the marginal benefit exceeds the marginal cost.

Consider a bicycle producer that initially employs 200 production workers and 10​ customer-service workers. When the firm outsources its​ customer-service operation to​ India, the 10​ customer-service workers lose their jobs. a. The net effect from outsourcing could be a loss of fewer than 10 jobs in the firm because A. the savings may allow the firm to hire more production workers. B. the savings may allow the firm to hire more​ customer-service workers. C. local laws may prevent employment reductions. D. the 200 production workers will work harder.

A. the savings may allow the firm to hire more production workers.

Solving a Tree Cutting Problem. Consider a hilly neighborhood where large trees provide shade but also block views. When a resident announces plans to cut down several trees to improve her​ view, her neighbors object and announce plans to block the tree cutting. One week​ later, the trees are​ gone, but everyone is happy. Use the principle of voluntary exchange to explain what could have happened. A. The resident bought her neighbors seedlings to plant in their yards. B. The resident paid for a block party for her neighbors. C. The resident paid her neighbors to let her cut down the trees. D. All of the above.

All of the above are possible exchanges that made both parties better off.

An excess demand for a product will cause the price to ________ . As a consequence of the price​ change, the quantity demanded will ________ and the quantity supplied will ___________

An excess demand for a product will cause the price to increase . As a consequence of the price​ change, the quantity demanded will decrease and the quantity supplied will increase .

Consider the market fornbsp restaurant meals. If consumer income increasesincreases​, andnbsp restaurant meals are normalnormal ​goods, what happens to the demand fornbsp restaurant ​meals? As a result of the change in consumer​ income, equilibrium price of meals will ____________ and equilibrium quantity of meals will _____________ .

As a result of the change in consumer​ income, equilibrium price of meals will increase and equilibrium quantity of meals will increase .

Normative statements answer questions like​ "What will happen​ if..." A. True B. False

B. False

Positive Statements answer questions like​ " What ought to happen​ to..." A. True B. False

B. False

Interest Rates and ATM Trips. KevinKevin​, who lives in a country where interest rates are very​ high, goes to an ATM every day to get​ $10 of spending money. JohnJohn​, who lives in a country with relatively low interest​ rates, goes to the ATM once a month to get​ $300 of spending money. Why does KevinKevin use the ATM more​ frequently? ​(Assume they both have interest bearing checking​ accounts.) A. Kevin ​doesn't like to carry a lot of cash. B. Kevin's opportunity cost of holding cash is higher. C. High interest rates imply low banking fees. D. John​'s opportunity cost of holding cash is higher.

B. Kevin's opportunity cost of holding cash is higher. The opportunity cost of holding cash is the forgone interest. The higher the interest​ rate, the higher the opportunity cost.

Which of the following is not a factor of​ production? A. Entrepreneurship. B. Money. C. Land. D. Human capital.

B. Money.

Why might pollution from a paper mill be an example of a market​ failure? A. People living near the paper mill are not offered jobs there. B. People living downwind of the mill bear part of the cost of production. C. The paper mill is ignoring property rights by polluting. D. None of the above.

B. People living downwind of the mill bear part of the cost of production.

b. There will be a net gain in jobs in the firm if A. other countries stop outsourcing. B. additional demand for bicycles creates a large boost in production. C. India stops outsourcing. D. the company develops a comparative advantage at producing bicycles.

B. additional demand for bicycles creates a large boost in production. If the cost savings from outsourcing are​ substantial, it will lead to lower prices for consumers and more demand for the firm. If demand for bicycles increases as a result of more income by consumers in the U.S. or​ India, more production workers will be needed.

Pirating​ Textbooks? The government protects intellectual property rights by enforcing copyright rules on textbooks. Suppose Google scans the pages of this and other introductory economics textbooks and makes them available for downloading at no charge. a. Supposing you are a current textbook​ consumer, you would be_______ . b. What are the implications for the next generation of economics​ students? A. Fewer textbook titles will be available for copy over the internet. B. Textbook publishers will not create as many new textbooks. C. Textbook producers will not supply as many textbooks. D. All of the above.

Better off D. All of the above.

What is the​ economist's solution to the congestion​ problem? A. Require people to carpool. B. Require people to move closer to their jobs. C. Charge a toll during rush hour. D. No economist would suggest any of the above.

C. Charge a toll during rush hour.

What is the economic cost of a pair of warships purchased by​ Malaysia? A. 200 tanks. B. The cost of materials and labor plus interest on loans from the IMF. C. Safe drinking water for 5 million people who lack it. D. None of the above.

C. Safe drinking water for 5 million people who lack it. Your answer is correct. The opportunity cost of something is what you sacrifice to get it. In this​ case, the mostly highly valued alternative was safe drinking water for 5 million people.

Which of the following does not expand economic​ growth? A. Widen economic opportunities B. Production facilities C. Scarcity D. New technology

C. Scarcity

Rising Price of Used Organs. Over the past few​ years, the price of used organs​ (livers, kidneys, and​ hearts) in the United States has increased dramatically. Which of the following is a possible explanation for the price​ increase? A. The​ population, in​ general, is healthier requiring less medical treatment. B. The U.S. government encourages the importation of organs donated from outside the U.S. C. The U.S. government banned imported organs AND demand for used organs is increasing. D. Demand for used organs is at an​ all-time low while the supply of used organs has not changed.

C. The U.S. government banned imported organs AND demand for used organs is increasing.

Marginal Cost of Housing. When the price of a standard three bedroom housethree bedroom house increases from ​$120 comma 000120,000 to ​$135 comma 000135,000​, a building company increases its production of houseshouses from 20 houseshouses per year to 21 houseshouses per year. What does this increase in the price of housing reveal about the cost of producing​ housing? A. The marginal benefit of the 21st househouse is just under ​$135 comma 000135,000. B. The marginal cost of the 21st househouse produced is greater than ​$135 comma 000135,000. C. The building company will only produce the 21st househouse if the marginal benefit from producing it exceeds the marginal cost. D. All of the above are correct.

C. The building company will only produce the 21st househouse if the marginal benefit from producing it exceeds the marginal cost.

Some markets are dominated by a few large​ firms, leading to A. large quantities and high profits. B. high prices and many choices. C. high prices and small quantities. D. intense competition and low profits.

C. high prices and small quantities. Markets dominated by only a few firms typically lack​ competition, which leads to high​ prices, small​ quantities, larger​ profits, and limited consumer choice.

In your decision about how much output to produce two years from​ now, would you use the principle of diminishing​ returns? A. ​Yes, because it is difficult to forecast 2 years into the future. B. ​No, because it is difficult to forecast 2 years into the future. C. ​No, because in the long run all inputs are variable. D. ​Yes, because in the long run some inputs are fixed.

C. ​No, because in the long run all inputs are variable. The principle of diminishing marginal returns is only relevant when at least one input of the production process is fixed. The entire facility could be expanded in two years.

Should a Heart Surgeon Do Her Own​ Plumbing? A heart surgeon is skillful at unplugging arteries and rerouting the flow of​ blood, and these skills also make her a very skillful plumber. She can clear a clogged drain in 6​ minutes, about 10 times faster than the most skillful plumber in town. Suppose the surgeon earns ​$20 per minute in heart surgery and the best plumber in town charges ​$100 per hour. Should the surgeon clear her own clogged​ drains? A. ​No, her opportunity cost is too low. B. ​Yes, her opportunity cost is too low. C. ​No, her opportunity cost is too high. D. ​Yes, her opportunity cost is too high.

C. ​No, her opportunity cost is too high. In the time it will take her to clear the​ drain, she can earn more doing surgery than it will cost to have a plumber clear it.​ Hence, the surgeon should not clear her own drains because her opportunity cost is too high.

Change in Demand or Supply How does the equilibrium price​ change? How does the equilibrium quantity​ change? Increase in supply Decrease in demand Decrease in supply Increase in demand

Change in Demand or Supply How does the equilibrium price​ change? How does the equilibrium quantity​ change? Increase in supply decreases increases Decrease in demand decreases decreases Decrease in supply increases decreases Increase in demand increases increases

Conservationists have a new strategy for preserving​ rainforests: ________ loggers and other developers for the​ land, paying as little as ​$________ per hectare per year.

Conservationists have a new strategy for preserving​ rainforests: bidding against loggers and other developers for the​ land, paying as little as ​$1 per hectare per year.

Which of the following is one of the three basic questions a society must​ answer? A. How do we produce the​ products? B. Who consumes the​ products? C. What products do we​ produce? D. All of the above.

D. All of the above.

The Opportunity Cost of a Mission to Mars. The United States has plans to spend billions of dollars on a mission to Mars. Various resources will be used to execute the​ mission, and sacrifices will be made to use those resources. Which of the following are possible opportunity costs of the​ mission? A. Hiring 1.8 million additional teachers for one year. B. Colonizing the moon. C. Setting up a missile defense system. D. All of the above.

D. All of the above. Most decisions involve several alternatives. To determine the opportunity cost of a trip to​ Mars, we must consider which of these is the next best alternative. All of the above are possible opportunity costs of a trip to Mars.

What Caused the Higher Gasoline​ Price? In the last​ month, the price of gasoline increased substantially and your job is to determine whether the increase is due to a change in demand or a change in supply. a. Which of the following questions would you ask to make your​ determination? A. Did equilibrium quantity increase or​ decrease? B. Did wages paid to oil refinery workers​ increase? C. Did the price of cars fall​ substantially? D. Any of the above.

D. Any of the above.

When to Use the Principle of Diminishing​ Returns? You are the manager of a firm that produces memory chips for mobile phones. In your decision about how much output to produce this​ week, would you use the principle of diminishing​ returns? A. Only if I were free to vary all my inputs. B. ​No, because​ I'm flexible in choosing my inputs. C. ​No, because in the short run some inputs are variable. D. ​Yes, because in the short run some inputs are fixed.

D. Given the short time​ period, you may be able to vary some​ inputs, but most likely at least one input would be fixed. The principle of diminishing marginal returns is only relevant when at least one input of the production process is fixed.

What does the Latin expression ceteris paribus​ mean? A. A measure of something that can take on different values. B. Resources are limited. C. Seize the day. D. Other things being held fixed.

D. Other things being held fixed.

Which of the following is not an element of the economic way of​ thinking? A. Rational people respond to incentives. B. Thinking at the margin. C. Use assumptions to simplify complex behavior. D. Use normative statements.

D. Use normative statements.

Meteorites travel from Mars to science laboratories on earth with the help of markets that involve A. ​astronauts, meteorite​ hunters, and local dealers. B. meteorite​ hunters, local​ dealers, and NASA. C. ​bio-geologists, local​ dealers, and the internet. D. meteorite​ hunters, local​ dealers, and the internet.

D. meteorite​ hunters, local​ dealers, and the internet.

Adam Smith listed three reasons for specialization to increase productivity. What are​ they? A. ​Repetition, Continuity, and Motivation. B. ​Repetition, Determination, and Innovation. C. ​Determination, Motivation, and Innovation. D. ​Repetition, Continuity, and Innovation.

D. ​Repetition, Continuity, and Innovation. Adam Smith asserts that specialization increases​ repetition, continuity, and innovation by allowing each worker to perform a single production task.

Determine which of the following variables​ "changes" or​ "remains fixed" as we move along the demand curve for pencils. The quantity of pencils demanded ___________ as we move along the demand curve for pencils. The number of consumers _____________ as we move along the demand curve for pencils. The price of pencils __________________ as we move along the demand curve for pencils. The price of pens ______________________ as we move along the demand curve for pencils. Consumer income _________________________ as we move along the demand curve for pencils.

Determine which of the following variables​ "changes" or​ "remains fixed" as we move along the demand curve for pencils. The quantity of pencils demanded changes as we move along the demand curve for pencils. The number of consumers remains fixed as we move along the demand curve for pencils. The price of pencils changes as we move along the demand curve for pencils. The price of pens remains fixed as we move along the demand curve for pencils. Consumer income remains fixed as we move along the demand curve for pencils.

Diminishing marginal returns is applicable when a firm is_________ in choosing​ inputs, but does not apply when a firm is______ in choosing its inputs.

Diminishing marginal returns is only relevant when a firm is inflexible in choosing​ inputs--It means that at least one input is fixed. For​ example, when we add workers to a facility with fixed​ inputs, each worker becomes less productive because she works with a smaller piece of the facility

Maps are a good​ non-economic example of using assumptions to make things simpler. Which of the following are assumptions used to make maps​ useful? A. The earth is flat. B. The roads are flat. C. ​Directions, such as north and​ south, can not be determined. D. All of the above. E. A and B are both correct.

E. A and B are both correct.

Excess demand occurs when the price is _______ than the equilibrium​ price; excess supply occurs when the price is _______ than the equilibrium price.

Excess demand occurs when the price is less than the equilibrium​ price; excess supply occurs when the price is greater than the equilibrium price.

Excess supply of a product will cause the price to _________ . As a consequence of the price​ change, the quantity demanded will ____________ ​, and the quantity supplied will ______________

Excess supply of a product will cause the price to decrease . As a consequence of the price​ change, the quantity demanded will increase ​, and the quantity supplied will decrease .

Four social inventions that support markets are _________ which specify the terms of​ exchange; ____________which reduces the risk of​ entrepreneurs; _________which increase the profitability of​ inventions; and _________ rules, which provide potential investors with reliable information about the financial performance of firms.

Four social inventions that support markets are contracts ​, which specify the terms of​ exchange; insurance ​, which reduces the risk of​ entrepreneurs; patents ​, which increase the profitability of​ inventions; and accounting ​rules, which provide potential investors with reliable information about the financial performance of firms.

From the following​ list, choose the variables that are​ "held fixed" or​ "not held​ fixed" when drawing a market supply curve. The price of the product is ______ when drawing a market supply curve. Wages paid to workers are _______ when drawing a market supply curve. The price of materials used in production is _______________ when drawing a market supply curve. Taxes paid by producers are __________________ when drawing a market supply curve. The quantity of the good produced is ________________________ when drawing a market supply curve.

From the following​ list, choose the variables that are​ "held fixed" or​ "not held​ fixed" when drawing a market supply curve. The price of the product is not held fixed when drawing a market supply curve. Wages paid to workers are held fixed when drawing a market supply curve. The price of materials used in production is held fixed when drawing a market supply curve. Taxes paid by producers are held fixed when drawing a market supply curve. The quantity of the good produced is not held fixed when drawing a market supply curve.

From the following​ list, use the​ drop-down menu to choose the variables that are​ "held fixed" in drawing a market demand curve. The price of the product is_____ in drawing a market demand curve. Consumer income is____ in drawing a market demand curve. The price of other related goods is _______ in drawing a market demand curve. Consumer expectations about future prices are ________ in drawing a market demand curve. The quantity of the product purchased is _________ in drawing a market demand curve.

From the following​ list, use the​ drop-down menu to choose the variables that are​ "held fixed" in drawing a market demand curve. The price of the product is not held fixed in drawing a market demand curve. Consumer income is held fixed in drawing a market demand curve. The price of other related goods is held fixed in drawing a market demand curve. Consumer expectations about future prices are held fixed in drawing a market demand curve. The quantity of the product purchased is not held fixed in drawing a market demand curve.

How much does the surgeon gain by hiring the plumber to clear a clogged​ drain? ​$_______

Her gain is the difference between the opportunity cost of clearing the drain herself and the cost of paying a plumber to do it. Opportunity cost for the surgeon is equal to her wage per minute times the amount of time it takes her to clear the drain​ (in minutes). Cost of paying the plumber to do it is equal to the​ plumber's wage per hour times the amount of​ time(in hours) it takes the plumber to clean the drain. Gain=​$20 x 6 minutes−100×1 hour=​$20

Suppose that over a​ one-year period, the nominal wage increases by 11 percent and consumer prices increase by 10 percent. The real wage________ by _______ %

If consumer prices rise by more than the nominal​ wage, the real wage​ (the wage in terms of how much can be​ purchased) will purchase fewer goods and services. The percentage change in the real wage is the percentage change in the nominal wage minus the percentage change in the price level.

Responses to Higher Soybean Prices. Suppose that in initial equilibrium in the soybean​ market, each of the​ 1,000 farmers produces 50​ units, for a total of​ 50,000 units of soybeans. Suppose the price of soybeans​ increases, and everyone expects the price to stay at the higher level for many years. a. Over a period of several​ years, we expect the quantity of soybeans supplied to______ as the number of soybean farmers ______ and the output per farmer ____ . b. A farmer who enters the market is likely to have a _________ marginal cost of production than an original firm.

Increase, increase, increase higher marginal cost At higher​ prices, soybean farmers will be willing to add land to the production of​ soybeans, supplying more soybeans. Since higher prices are expected to​ persist, more farmers will become soybean farmers. A higher price encourages farmers to increase output by purchasing more supplies and hiring more workers. To increase the​ workforce, farmers might be forced to pay overtime or hire workers who are more costly or less productive than the original workers. But the higher soybean price makes it worthwhile to incur these higher costs.

It will be sensible to run a​ half-empty flight if the marginal ______ of the flight is ________ than ____ .

It will be sensible to run a​ half-empty flight if the marginal cost of the flight is less than the marginal benefit. Since the marginal benefit of the flight is the​ revenue, it would only be sensible to run the​ half-empty flight if the marginal cost is less than​ $3,100.

Indicate whether each of the following is a normative or positive question. Who is the United States largest trading​ partner? Is the president doing a good​ job? Should the highway speed limit be​ raised? What will happen to my income if I have to pay more​ taxes? Should the government raise​ taxes?

Positive, normative, normative, normative, positive, normative

The market demand curve for a normal good will shift to the rightright ​(increaseincrease​) when the price of a substitute good ___________ ​, the price of a complementary good _____________ ​, consumer income ____________ ​, and population ___________________ .

The market demand curve for a normal good will shift to the rightright ​(increaseincrease​) when the price of a substitute good increases ​, the price of a complementary good decreases ​, consumer income increases ​, and population increases .

The market demand curve is the________ sum of the individual demand curves.

The market demand curve is the horizontal sum of the individual demand curves. The market demand curve shows the relationship between the price of the good and the quantity demanded by all individual​ consumers, ceteris paribus.

Adam Smith suggested that people act in their own self−interest True/false

True

Economists may differ in their conclusions from positive analysis. A. True B. False

True

Feeding the World from a​ Flowerpot? Comment on the following​ statement: "If agriculture did not experience diminishing​ returns, we could feed the world using the soil from a small​ flowerpot." True or False

True

Increased economic growth would reduce poverty in​ Sub-Saharan Africa. true/false

True

The legal system is an example of an institution that plays a key role in economic growth. True/false

True, Institutions, such as the legal system and the regulatory​ environment, that encourage and promote entrepreneurship help create an environment for economic growth.

The government protects intellectual property rights by enforcing patents on new pharmaceutical drugs. Suppose the​ government, by enforcing patent​ laws, prevents a new drug by Merck from being copied by another company and made available at a dramatically reduced price. If you were a current consumer of this new pharmaceutical​ drug, you would initially be________ as a result of the​ government's action. What are the implications for the next generation of pharmaceutical drug​ users? A. Pharmaceutical companies will no longer face pressure to​ create, test, and bring to market new drugs. B. Pharmaceutical companies will have more revenue to cover research and development costs. C. Fewer pharmaceutical drugs will be available in the future. D. All of the above.

Worse off B. Pharmaceutical companies will have more revenue to cover research and development costs.

A taxi company currently has nine cabs in its​ fleet, and its total daily cost is ​$4,600. If a taxi company adds a tenth​ cab, the​ company's total daily cost will increase to ​$4,750 and its total revenue will increase by ​$200 per day. Should the company add the tenth​ cab?

Yes The company should add a tenth cab if the marginal benefit is greater than the marginal cost. The marginal benefit is ​$200 and the marginal cost is ​$150 ​(marginal cost equals the change in total​ cost: ​$4,750− ​$4,600=$150​).

As a result of the financial crisis that began in late​ 2007, economic activity around the world________

contracted

Trade between different prisoner of war​ (POW) compounds __________ the difference in the price of beef across the compounds.

decreased

An in the supply of a product ____________ the equilibrium price and ____________ the equilibrium quantity.

decreases, increases

As a farmer adds more and more fertilizer to the​ soil, the crop yield______, but at a ______ rate.

increases at a decreasing rate As long as the additional fertilizer​ doesn't overwhelm the other nutrients in the​ soil, output will increase.

In the first three months of​ 2004, the number of jobs moving to another statestate was _______ than the number of jobs moving to another country

larger

By promoting competition the government generates _____ product prices

lower

A change in a variable measured on an axis of a graph causes a ________, while a change in a relevant variable that is not measured on an axis causes a______________.

movement along the​ curve; shift in the curve

Percent Change

percent change= (second value-first value)/(first value) * 100