Which good would be likely to be bought in the same quantity even if it doubled in price?
a. shoes
b. telephones
c. pencils
d. computers
Ans: c. pencils
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Employing a fixed-weight index like the Consumer Price Index to adjust a person's salary in response to inflation will overcompensate this person because doing so will allow this person to
A) buy the same bundle of goods as he did before the inflation. B) achieve a higher level of utility than he did before the inflation. C) achieve the same level of utility as before the inflation. D) buy more of all goods.
An "increase in demand" means that
A) the demand curve has shifted to the left. B) price has declined and consumers want to purchase more of the good. C) the demand curve has shifted to the right. D) the price of the good can be expected to decline, assuming supply stays constant.
When a subsidy is paid to potato growers, the market equilibrium quantity of potatoes ____ and the market price ____. In the market for potatoes, the MSC ____ MSB.
Fill in the blank(s) with the appropriate word(s).
A demand curve with constant slope over all quantity values can have a continuously changing price elasticity of demand.
Answer the following statement true (T) or false (F)