Historical data on prices and quantities sold do not provide the basis for drawing an accurate demand curve because
a. reporters who gather these data are often wrong.
b. factors other than price may change over time.
c. they do not include measures of price close to the quantity axis.
d. they sometimes tend to be clustered around one point.
b
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At the equilibrium consumption bundle, which of the following holds?
A. MRSX,Y = ?PX/PY. B. MRSX,Y = PX/PY. C. MRSX,Y = PY/PX. D. MRSX,Y = ?PY/PX.
Perfect competition is characterized by many firms and no barriers to entry.
Answer the following statement true (T) or false (F)
Use the following graph to answer the next question.
In the graph, Dt is the transactions demand for money, Dm is the total demand for money, and Sm is the supply of money. The market is initially in equilibrium at a 6% interest rate. If the money supply increases, then Sm2 will shift to
A. Sm3 and the interest rate will be 8%. B. Sm3 and the interest rate will be 4%. C. Sm1 and the interest rate will be 8%. D. Sm1 and the interest rate will be 4%.
Some people have argued that government should provide only those goods that we would truly define as public goods. If so, which of the following should government produce?
a. National Defense b. day-care centers for children of working mothers c. mail delivery d. unemployment benefits e. subsidies for agricultural products