A decrease in the price of coffee, other things being equal, causes a(n):
A. leftward shift in the demand curve for coffee.
B. downward movement along the demand curve for coffee.
C. rightward shift in the demand curve for coffee.
D. upward movement along the demand curve for coffee.
Answer: B
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When a monopolistically competitive firm cuts its price to increase its sales, it experiences a gain in revenue due to the
A) output effect. B) substitution effect. C) income effect. D) price effect.
An economy that operates below its full-employment capacity experiences
a. disequilibrium b. unrealizable inflationary expectations c. a gap in aggregate demand d. an inflationary gap e. a recessionary gap
Kim's demand curve for sodas:
A. assumes that the only variables that change are the price of sodas and the quantity of sodas demanded by Kim. B. shows the quantity of sodas Kim consumes as her preference for sodas change. C. makes no assumptions about Kim's preference for sodas. D. assumes that the only variable that changes is Kim's income.
The data in the above figure indicate that the economy will be in a long-run macroeconomic equilibrium at a price level of
A) 140. B) 130. C) 100. D) 120.