The law of supply states that:
A. there is a negative relationship between the price of a good and the quantity of it purchased by suppliers.
B. there is a positive relationship between the price of a good and the quantity that buyers choose to purchase.
C. there is a positive relationship between the price of a good and the quantity of it offered for sale by suppliers.
D. at a lower price, a greater quantity will be supplied.
Answer: C
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The greater the magnitude of the absolute value of the income elasticity of demand for a good, the more the
A) demand for that good changes when income changes. B) total revenue for firms producing that good changes when income changes. C) price of the good changes when income changes. D) All of the above answers are correct.
An increase in unemployment insurance and other transfer payments may
A) increase the natural rate of unemployment. B) increase the number of discouraged workers. C) reduce the rate of inflation at every level of unemployment. D) lead to less unanticipated inflation.
Explain why Adam Smith believed that competitive markets are a key component of achieving the gains from the invisible hand.
What will be an ideal response?
A cost imposed on people other than the consumers of a good or service is a:
a. price floor. b. negative externality. c. positive externality. d. price externality.