Graphically, the effect of a government subsidy on a good is shown as
A) a leftward shift of the market demand curve.
B) a rightward shift of the market demand curve.
C) a downward movement along the market demand curve.
D) no change to the market demand curve.
Answer: B
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The smaller the marginal propensity to save, other things constant, _____
a. the smaller the marginal propensity to consume b. the larger the marginal propensity to consume c. the smaller the multiplier d. the flatter the consumption function e. the steeper the saving function
LISA BETH Mustard Company undertakes an advertising campaign and finds that within the industry's relevant price range, the price elasticity of demand for its own mustard fell from 3.5 to 0.94 . As a result, we would expect that LISA BETH
a. would raise its price to increase total revenue b. would cut its price to increase total revenue c. would increase output to increase total revenue d. would increase output to reduce average total cost e. operates in a perfectly competitive market
An important assumption that is made when constructing a demand schedule is that
a. only price and quantity matter in determining demand. b. people always want a certain amount of a product. c. demand is too important to be left to the economists. d. all other determinants of demand are held constant. e. demand has a positive slope.
The European Commission is the European Union's ultimate decision-making body and is composed of the different ministers of the member countries.
a. true b. false