An increase in the price of a good
A. increases the incentive to buy the good, but decreases the incentive to sell the good.
B. decreases the incentive to buy the good, but increases the incentive to sell the good.
C. increases both the incentive to buy the good and the incentive to sell the good.
D. decreases both the incentive to buy the good and the incentive to sell the good.
B. decreases the incentive to buy the good, but increases the incentive to sell the good.
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The fact the consumers substitute one good for another when prices change is
A) taken into account by the fixed market basket used in calculating the CPI. B) not taken into account by the fixed market basket used in calculating the CPI. C) not important to economists. D) a reason why the CPI is used to calculate inflation rates. E) a reason why the CPI understates the actual change in the cost of living.
In the above figure, if the price is P1 and the firm produced Q3, the firm's economic profit is ________ than if it produced Q1 and ________ than if it produced Q2
A) less; less B) less; more C) more; less D) more; more
Refer to the above figure. A movement from point A to point B for a good is most likely a result of
A) an increase in the price of that good. B) a decrease in the price of that good. C) an expectation of an increase in the relative price of that good. D) an expectation of a decrease in the relative price of that good.
Sometimes On Time (SOT) Airlines is considering buying a new jet. SOT would be more likely to buy a new jet if there were either
a. a decrease in the price of a new jet or a decrease in the interest rate. b. a decrease in the price of a new jet or an increase in the interest rate. c. an increase in the price of a new jet or a decrease in the interest rate. d. an increase in the price of a new jet or an increase in the interest rate.