Holding supply constant, a reduction in demand leads to
A) lower prices and higher quantity supplied.
B) lower prices and lower quantity supplied.
C) higher prices and higher quantity supplied.
D) higher prices and lower quantity supplied.
Answer: B
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If the percentage increase in the quantity supplied is greater than the percentage increase in the price, the supply:
A. is perfectly elastic. B. is elastic. C. is inelastic. D. is unit elastic.
Marginal utility theory predicts that
A) when the price of a good rises, the quantity demanded of that good decreases. B) if the price of one good rises, the demand for a substitute good increases. C) if income increases, the demand for a normal good increases. D) All of the above answers are correct because all are predictions of marginal utility theory.
Expectations are destabilizing if they are based on the belief that exchange rates eventually return to the values consistent with basic economic conditions.
Answer the following statement true (T) or false (F)
If the price of Pepsi decreases, all else held constant, then we'd expect to see a consequent shift of the demand curve for
A. Pepsi to the right. B. Coke to the right. C. Coke to the left. D. Pepsi to the left.