If people base their spending decisions more on current income than on permanent income, then _____
Fill in the blank(s) with the appropriate word(s).
consumption spending will be more responsive to a temporary change in income than a change in permanent income.
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According to the law of supply
A) people buy more of a good when the price increases. B) people buy less of a good when the price decreases. C) producers provide more of a good when the price decreases. D) producers provide less of a good when the price decreases.
Price discrimination occurs when a monopolist charges
a. both c and d b. different prices to different buyers for different products c. different prices to different groups of buyers, based on differences in the cost of providing the commodity to the buyer d. different prices to different groups of buyers for reasons unrelated to the cost of providing the commodity to the buyer e. all buyers the same price for the same product
Zara is the largest fashion retailer in Europe. Which of the following would not a barrier to entry that protects Zara's market power?
a. two weeks to develop and deliver a new item, as opposed to an industry average of nine months b. 10,000 new designs a year c. stores can restock in a few days d. little advertising e. new fashions distributed twice a week, as opposed to twice a season
Which of the following actions could be undertaken if the government wants to close an inflationary gap?
A. Increase taxes and reduce government spending. B. Reduce taxes and reduce government spending. C. Increase taxes and increase government spending. D. Reduce taxes and increase government spending.