Which economic principle states that when the price of a good is reduced, the quantity of that good demanded will increase?
a. the law of consumer choice
b. the law of consumer equilibrium
c. the law of demand
d. the law of diminishing marginal utility
c. the law of demand
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Which of the following describes a moral hazard problem?
A) a process by which individuals have substantial resources devoted to the exchange process and need to make a profit or they will be adversely affected B) a process by which individual buyers or sellers with better information are more likely to participate in voluntary exchange C) a contractual problem that results because monopolies exist in all economies D) a post-contractual problem that may result because participants to the exchange process have information that allows them to act in an opportunistic manner
Explain how a tax cut effects employment, labor productivity, and potential GDP
What will be an ideal response?
The above figure shows the market for biologists. The government decides to set a minimum wage for biologists of $18 per hour. After this minimum wage is in effect, the deadweight loss equals ________
A) $400 B) $200 C) $800 D) $1600 E) $100
Which of the following will cause the aggregate demand curve to shift to the left?
A) An increase in the price level B) An increase in the interest rate C) An increase in money demand D) An increase in investment expenditures