Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to
A) a decrease in the supply of electric cars so that the supply curve shifts rightward.
B) an increase in the supply electric cars so that the supply curve shifts rightward.
C) an increase in the supply of electric cars so that the supply curve shifts leftward.
D) a decrease in the supply of electric cars so that the supply curve shifts leftward.
E) no change in the supply of electric cars, only a change in the quantity supplied of electric cars.
B
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Money illusion is
A) when people think they are better off when their income increases even though prices have increased by the same amount. B) when people are motivated by self-interest. C) could not exist if the economy did not have competitive markets. D) a basic condition that all classical economists assume people have.
If a perfectly competitive firm raises its price,
a. the quantity demanded of its good falls because the firm faces a downward- sloping demand curve b. the quantity demanded of its good falls to zero c. new firms will enter, attracted by the higher price d. it loses some of its market share e. other firms in the industry must follow the leader
The demand for land is derived from ______________.
Fill in the blank(s) with the appropriate word(s).
Properly enforced property rights will usually cause
A. lower levels of investment spending. B. lower levels of real interest rates. C. higher levels of investment spending. D. higher levels of real interest rates.