"The price of digital cameras fell because of improvements in production technology. As a result, the demand for non-digital cameras decreased
This caused the price of non-digital cameras to fall; as the price of non-digital cameras fell the demand for non-digital cameras decreased even further." Evaluate this statement.
A) The statement is false because digital camera producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits.
B) The statement is false because the demand for non-digital cameras would increase as the price of digital cameras fell.
C) The statement is false. A decrease in the price of digital cameras would decrease the demand for non-digital cameras, but a decrease in the price of non-digital cameras would not cause the demand for non-digital cameras to decrease.
D) The statement is false because it confuses the law of demand with the law of supply.
C
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One way to view equilibrium in the simple Keynesian model without government spending and taxes is that:
A) saving equals planned investment. B) saving equals planned expenditures. C) saving equals planned autonomous spending. D) None of the above.
Kuznets's research showed that the marginal propensity to consume remains constant as national income rises
Indicate whether the statement is true or false
Which of the following best describes compensating wage differentials?
a. Some jobs are more difficult than others, and the pay for them reflects this. b. Some jobs require more training than others, and the pay for them reflects this. c. Some jobs require more experience than others, and the pay for them reflects this. d. Some jobs require unique abilities, and the pay for them reflects this.
Refer to the diagram. An industrial (inclusive) union could increase employment in this labor market:
A. by negotiating any wage rate between W 1 and W 4 .
B. by negotiating a wage rate greater than W 4 .
C. only if it accepted a wage rate below W 1 .
D. only if it could shift the labor demand curve rightward.