Explain why a demand curve slopes downward.
What will be an ideal response?
As the price of a good decreases, more consumers are inclined to purchase it, increasing the quantity demanded. Since the demand curve is graphed with price on the vertical axis (higher prices at higher points) and quantity demanded on the horizontal axis (higher quantities to the right), this leads to a demand curve with a negative (downward) slope.
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Physical or technological facts are by themselves never sufficient to measure efficiency because
A) what is efficient changes over time. B) efficiency is a ratio between evaluations. C) more complex technological processes are inevitably more efficient. D) physical or technological data can never be known precisely. E) we can never be sure we are using the most advanced technology.
Refer to Figure 14.1. Other things equal, which of the following will cause a movement from point Y to point X?
A) an increase in the real interest rate B) a decrease in disposable income C) a decrease in expected profits for firms D) an increase in net exports
Total profit is maximized where
A. MR = MC. B. marginal profit is zero. C. the slope of the marginal profit curve is zero. D. All of the responses are correct.
The national income accounting system measures economic activity based on the concept of _____
a. absolute advantage of different industries in an economy b. the circular flow of precious metal and money through the different sectors of an economy c. comparative advantage of different industries in an economy d. the circular flow of output and income through the different sectors of an economy e. the circular flow of labor and other resources through the different sectors of an economy