As disposable income increases, consumption:
A. decreases.
B. may either increase or decrease depending on the wealth effect.
C. increases.
D. may either increase or decrease depending on the mpc.
Answer: C
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Refer to Figure 28-9. A supply shock, such as rising oil prices, would be depicted as a movement from
A) C to E to B. B) C to D to A. C) C to B to A. D) A to B to C. E) A to D to C.
If an incumbent cannot commit and faces an identical potential entrant with relatively high fixed costs that are below the level where entry is blockaded, the incumbent will
A) produce the Cournot duopolist level of output. B) produce the Stackelberg leader level of output. C) set price equal to marginal cost. D) produce a level of output that is greater than the Stackelberg leader level of output.
The effect of a rise in peoples' incomes on equilibrium price and quantity of Florida orange juice is to
a. increase equilibrium price and quantity b. decrease equilibrium price and quantity c. increase equilibrium price and decrease equilibrium quantity d. increase equilibrium quantity and decrease equilibrium price e. decrease equilibrium price and increase equilibrium
The economic benefits of owning a home are greater when home prices are
a. falling and interest rates are high. b. rising and interest rates are low. c. rising and interest rates are high. d. falling and interest rates are low.