At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?
A. Yes, Martha is correct. Sam's demand has decreased.
B. No, Martha is incorrect. Sam's demand has increased.
C. No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed.
D. No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased.
Answer: C
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The South's economy was based on production of
A. iron, steel and textiles. B. corn, wheat and soybeans. C. tobacco, cotton and rice. D. iron, wheat and cotton.
Suppose an individual has a fixed amount of wealth to allocate between consumption in two periods (C1 and C2). Any funds not spent in period 1 will earn interest (at the rate r), which will increase purchasing power in period 2 . Consider four possible reactions to an increase in r: I. C1 increases. II. C1 decreases. III. C2 increases. IV. C2 decreases. Which of these is consistent with the
hypothesis that both C1 and C2 are normal goods? a. I, II, III, and IV. b. I, II, and IV, but not III. c. I, III, and IV, but not II. d. II and III, but not I and IV. e. I, II and III, but not IV.
Increases in the marginal propensity to consume (MPC), other things constant, _____
a. increase the value of the multiplier b. decrease the value of the multiplier c. increase the marginal propensity to save d. shift the aggregate expenditure curve downward e. cause a downward movement along the aggregate expenditure curve
Which of the following graphs or charts must add up to one hundred percent?
a. a labor graph b. a pie chart c. a time-series graph d. a scatter diagram