Are there ever exceptions to the law of demand?
What will be an ideal response?
When consumers associate quality with high price (name-brand preferences, for example), the result is an upward-sloping demand curve. Similarly, “snob appeal,” buying because the good is priced higher than other goods in the same general category, produces a market demand curve that slopes upward.
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If people have more time to adjust to a price change, the price elasticity of demand for that good is likely to
a. increase b. decrease c. fall to zero d. become equal to -1 e. remain unchanged
As the dollar depreciates, which of the following is most likely to occur?
a. More Americans will travel abroad. b. American imports will rise. c. More foreigners will visit the United States. d. American firms will increase their investments abroad.
The actual exchange rate of the real, Brazil's currency, is 2.50 real per U.S. dollar. According to the latest PPP estimations, the real is undervalued by 40 percent. This implies that the PPP exchange rate is:
A. 1.40 real per dollar. B. 1.20 real per dollar. C. 1.50 real per dollar. D. 2.00 real per dollar.
A dominant firm's residual demand curve is
A) the horizontal difference between the market demand curve and the supply curve of the fringe firms. B) the vertical difference between the market demand curve and the supply curve of the fringe firms. C) the demand curve left for the fringe firms after the dominant firm has determined an output level. D) None of the above.