(1)(2)(3)(4)(5)QdQdPriceQsQs5040$1070806050960708060850609070740501008063040Refer to the above table. In relation to column (3), a change from column (1) to column (2) would mostly likely be caused by:
A. consumers expecting that prices will be higher in the future.
B. government subsidizing production of the good.
C. reduced taste for the good.
D. an increase in input prices.
Answer: C
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a. the marginal utility of A = the marginal utility of B b. the marginal utility of A = the marginal utility of B = 0 c. the price of A = price of B d. marginal utility of A/price of A = marginal utility of B/price of B = 0 e. marginal utility of A/price of A = marginal utility of B/price of B
According to the quantity theory of money, if the economy were facing inflation, the Federal Reserve Bank could combat it by:
A. increasing the supply of money. B. increasing taxes. C. cutting taxes. D. decreasing the supply of money.
Figure 6.4 represents a perfectly competitive firm's costs. Illustrate the firm's shut-down price on the graph. Explain.
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