The estimated demand for a good is
= 4800 - 16P - 0.65M - 1.5PRwhere Q is the quantity demanded of the good, P is the price of the good, M is income, and PR is the price of related good R. The coefficient on P
A. is negative as dictated by the law of demand.
B. violates the law of demand.
C. should not be greater than one (in absolute value).
D. should have the same sign as the coefficient on PR.
E. both c and d
Answer: A
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Underproduction of good ________ create a deadweight loss and overproduction of a good ________ create a deadweight loss
A) will; will B) will; will not C) will not; will D) will not; will not
The aggregate demand curve slopes:
A. downward, like individual supply curves. B. downward, like individual demand curves. C. upward, like individual supply curves. D. upward, like individual demand curves.
The first bottle of water increases Clarke's utility by 20 utils. The second bottle of water increases utility by 18 utils. The third bottle of water increases his utility by 15 utils. The marginal utility of the third bottle of water is 3 utils
a. True b. False Indicate whether the statement is true or false