Suppose a Market with a Downward-Sloping Demand Curve Were Currently

question 65

Multiple Choice

Suppose a market with a downward-sloping demand curve were currently at equilibrium. A rightward shift of the supply curve would cause a(n)

• A)increase in price and a decrease in quantity.
• B)decrease in price and an increase in quantity.
• C)increase in both price and quantity.
• D)decrease in both price and quantity.

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Definitions:

Principal-agent Problem

A conflict of interest that arises when one party (the agent) is expected to act in the best interest of another (the principal) but has incentives to act in their own interest.

Purely Competitive Labor Market

A resource market in which many firms compete with one another in hiring a specific kind of labor, numerous equally qualified workers supply that labor, and no one controls the market wage rate.

Rate of Unionization

The percentage of workers who are members of a union within a particular workforce or industry.

Protective Service Workers

Individuals employed in occupations that focus on public safety, law enforcement, and security services.