Which of the following will cause the demand curve for a good to shift to the left?
a. an increase in the price of the good
b. a decrease in the price of the good
c. a decrease in the price of a complementary good
d. an expectation of a future price decline
e. an increase in the price of a substitute good
D
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Which of the following would most likely exhibit the highest price elasticity of demand?
A) gasoline B) one particular brand of toothpaste C) motor oil D) salt
Which of the following statements concerning the shareholder wealth maximization model is (are) true?
a. The timing of future profits is explicitly considered. b. The model provides a conceptual basis for evaluating differential levels of risk. c. The model is only valid for dividend-paying firms. d. a and b e. a, b, and c
Suppose a tax of $3 is imposed on each new garden hose that is sold, resulting in a deadweight loss of $22,500 . The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. Before the tax was imposed, the equilibrium quantity of garden hoses was 100,000 . We can conclude that the equilibrium quantity of garden hoses after the tax
is imposed is a. 75,000. b. 85,000. c. 90,000. d. 95,000.
Which of the following most likely occurs when an inflationary gap exists?
A. Rising inventories. B. More layoffs. C. Excessive saving. D. Producers will use overtime shifts and strain capacity.