Consider the ordinary and compensated demand curves for a normal good. If the price of the good falls, then
a. the ordinary demand curve will show the larger increase in quantity demanded.
b. the compensated demand curve will show the larger increase in quantity demanded.
c. the increase in quantity demanded will be the same for the ordinary and compensated demand curves.
d. we cannot predict whether ordinary or compensated demand will show the larger response in quantity demanded.
a. the ordinary demand curve will show the larger increase in quantity demanded.
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When a demand curve shifts, both the equilibrium price and quantity traded will change in the same direction as a result
a. True b. False Indicate whether the statement is true or false
Refer to Figure 8.4. The marginal cost of the sixth microwave oven is A) $83.33. B) $116.67. C) $200. D) $1200.
Peter Theil sees monopolies as:
A. solving a unique problem for consumers. B. bad for business. C. bad for consumers. D. bad for society.
Which of the following is true about a liquidity trap situation:
a. Quantitative easing might be a more effective strategy to stimulate the economy than buying short term government securities.
b. Quantitative easing may be able to affect long term interest rates even when the Fed is unable to appreciably lower short term interest rates.
c. The Fed cannot easily reduce the fed funds interest rate.
d. All of the above are true.