Which of the following is an example of conspicuous consumption?
A. Purchasing an expensive automobile to impress others
B. Purchasing of hip-hugger pants because pop stars wear them
C. Avoiding cheap computers because low price indicates low quality
D. Purchasing fast food because it is cheap and convenient
Answer: A
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A simultaneous decrease in the demand and the supply of good X always leads to a decrease in the price of good X
Indicate whether the statement is true or false
Deficits may be desirable in the short run if they:
A. increase savings necessary for future consumption and demand. B. increase savings necessary for future investment and growth. C. help to stabilize the economy when the economy is above potential output. D. help to stabilize the economy when the economy falls below potential output.
An increase in the productivity of labor causes
A) quantity supplied by each firm in a competitive industry to decrease. B) supply in a competitive industry to increase. C) the market price to increase in a competitive industry. D) the firm's supply curve to shift but has no effect on the industry supply curve.
On the graph, label the short-run and long-run supply curves.
