In a competitive market for corn, the law of demand indicates that, other things equal, as:
a. The price of corn decreases, the quantity of corn demanded will decrease
b. Income decreases, the quantity of corn demanded will increase
c. The demand for corn decreases, the price will increase
d. The price of corn rises, the quantity of corn demanded will fall
Ans: d. The price of corn rises, the quantity of corn demanded will fall
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Vacation tours to Europe invariably package visits to disparate regions: cities, mountains, and the seaside. Bundling, a type of second degree price discrimination, is most profitable when:
a. the preference rankings of vacationers travelling together are negatively correlated. b. a preference for cities is always higher than preferences for mountain vistas. c. preference rankings of vacationers travelling together are positively correlated. d. preference for the seaside is always higher than preferences for city excursions. e. no one wants to take a European vacation package to cities, mountains, and the seaside.
Suppose that nominal GDP did not change in 2011, and real GDP decreased, relative to the year 2010 . It can be concluded that: a. total production of goods and services in the economy did not change in 2011. b. the economy experienced deflation during 2011
c. the price level did not change during 2011. d. total production of goods and services in the economy declined during 2011.
What to do about inflationary and employment problems in the economy? Conservative economists advocate
a. strong fiscal policy, particularly taxing luxuries b. strong monetary policy, particularly taxing luxuries c. no interference in the private sector d. that to pursue aggressive and consistent policy, the Federal Reserve System should become a department with the executive branch of government e. relying on trends in real business cycles to implement expansionary fiscal policy
Changes in the value of the euro affect the economies of
A. No countries as long as exchange rates are flexible. B. Only those countries using the euro as currency. C. Potentially the entire world. D. All European countries, but there would be no significant impact on countries outside Europe.