The law of demand states that the quantity demanded of a good is inversely related to the price of that good. Therefore, as the price of a good goes:
A. down, the quantity demanded stays the same.
B. up, the quantity demanded goes down.
C. up, the quantity demanded also goes up.
D. down, the quantity demanded goes down.
Answer: B
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As we move downward along a typical isoquant, the slope of the isoquant
A) becomes flatter. B) becomes steeper. C) remains constant. D) becomes linear.
An increase in supply causes
A) quantity supplied to decrease. B) supply and price to increase. C) price to decrease. D) price to increase.
How different is medical care from other commodities? Arrow based his thesis on a number of characteristics that contribute to the unique nature of medical care. Which of the following characteristics was not one of those he lists?
a. Trust b. Asymmetric information c. Primary payment from insurance d. Preponderance of not-for-profit providers e. Barriers to entry
Which of the following is most likely to cause the aggregate supply curve to shift to the right?
A. A one-time tax rebate. B. A decrease in marginal tax rates. C. A decrease in international trade. D. An increase in the money supply.