Answer the following statement(s) true (T) or false (F)
1. If the price of a good changes, the demand for the good changes.
2. When the quantity demanded by consumers goes up, we can be sure that there has been a rise in demand
3. A demand curve is drawn downward sloping to show that price and quantity demanded will move in opposite directions as long as other relevant factors remain unchanged.
4. An increase in the price of compact discs would shift the demand curve for DVD players to the left.
5. An increase in the price of gasoline would shift the demand curve for gasoline to the left.
1. False
2. False
3. True
4. True
5. False
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Rivalry among firms would tend to be highest if
a. the industry is growing quickly b. the industry is growing slowly c. the industry is shrinking d. None of the above
Which of the following is not a characteristic of pure capitalism?
a. private property rights b. competitive markets c. laissez-faire policies d. central planning e. a reliance on prices to direct resources to their best uses
Suppose the price of a quart of milk rises from $1.00 to $1.20 and the price of a T-shirt rises from $8.00 to $9.60 . If the CPI rises from 150 to 195, then people likely will buy
a. more milk and more T-shirts. b. more milk and fewer T-shirts. c. less milk and more T-shirts. d. less milk and fewer T-shirts.
Firms have an incentive to substitute labor for capital as the
A. marginal product of labor decreases. B. price of capital increases. C. price of labor increases. D. price of capital decreases.