The following figure shows the demand curves for baby formula. Which of the following changes is likely to happen if the price of baby formula increases?
Ans: D. A movement along the demand curve D2 from point d to point c
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The advantage of automatic stabilizers is that they
A) reduce the fluctuations in the business cycle. B) help to balance the budget. C) reduce the size of the net public debt. D) help reduce the inflation rate.
The higher the interest rates
a. the more value individuals place on future dollars b. the more value individuals place on current dollars c. individuals do not place any importance on either current or future dollars d. does not affect the investment strategy
Which of the following is not true with respect to the rule used to determine the firm's profit-maximizing quantity demanded of capital? a. It is similar to the rule used to determine the firm's profit-maximizing quantity demanded of labor
b. It is similar to marginal labor cost divided by marginal revenue. c. It takes the interest rate into consideration. d. It equates marginal revenue product of capital to marginal factor cost. e. It equates the present value of capital to expected future rents.
"The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.". This statement is from:
a. Hayek b. Mises c. Friedman d. Samuelson e. None of the above