Which of the following statements is INCORRECT?
A. As the price of X falls and we move down an individual's demand curve for X, the money income of the individual also changes.
B. If a firm decreases the price of its product, its total revenue must decrease.
C. The own price elasticity of demand is constant at all points along a linear demand curve.
D. None of the statements is correct.
Answer: D
You might also like to view...
Economic models
a. are people who act out the behavior of firms and households so that economists can study this behavior. b. are usually detailed replications of reality. c. incorporate simplifying assumptions that often contradict reality, but also help economists better understand reality. d. are useful to researchers but not to teachers because economic models omit many details of the real-world economy.
Based on the graphs showing price discrimination in movie ticket prices, if the theatre charges $11 per ticket at the matinee, it will ______.
a. maximize profits
b. sell too many tickets
c. sell too few tickets
d. sell no tickets
The demand for computers increases. As a result
A) the quantity demanded of workers increases, the wage rate rises, and the supply of labor increases. B) the demand for workers increases, hiring increases, but wages stay the same since each firm faces a horizontal supply curve of labor. C) the wage rate increases in the industry and the quantity demanded of workers falls. D) the wage rate increases in the industry and the quantity supplied of workers increases.
The income effect of a wage rate decrease should lead to
A. a decrease in quantity of labor supplied and an increase in leisure. B. an increase in the quantity of labor supplied and a decrease in leisure. C. a decrease in the quantity of labor supplied and a decrease in leisure. D. an increase in the quantity of labor supplied and an increase in leisure.