Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM. From the law of demand we know that ax will be:
A. greater than zero.
B. less than zero.
C. zero.
D. none of the statements associated with this question are correct.
Answer: B
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From 1970 to 2010, as a fraction of GDP, the quantity of money that people and businesses have held has been
A) independent of people's use of credit cards. B) increasing. C) decreasing. D) fluctuating erratically. E) changing only as the interest rate changed.
Which is not true of market equilibrium?
A. Circumstances can change from day to day which make any equilibrium very tentative. B. All sellers who want to sell at the equilibrium price can find a buyer to sell to. C. All buyers who want to buy at the equilibrium price can find a seller to buy from. D. It is the most desirable outcome that a social order could have.
The substitution effect and the output effect
A. always work in the same direction. B. sometimes work in the same direction. C. always work in the opposite direction. D. sometimes work in the opposite direction.
The rate at which a consumer is ABLE to substitute one good for another is determined by
A. the marginal rate of substitution. B. the budget line C. the consumer's income. D. the indifference map.