An assumption underlying indifference curve analysis is that MUx/MUy ________ as less of X and more of Y is consumed.
A. remains constant
B. decreases
C. always equals one
D. increases
Answer: D
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If, for a product, the quantity supplied exceeds the quantity demanded, the market price will fall until
A) all consumers will be able to afford the product. B) the quantity demanded exceeds the quantity supplied. The market will then be in equilibrium. C) quantity demanded equals quantity supplied. The equilibrium price will then be lower than the market price. D) quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.
The AD curve shifts to the right with a __________ in government purchases (G) or a __________ in taxes
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
Protecting property rights:
A. by governments will likely increase productivity. B. is essential to economic growth. C. encourages people to invest in capital. D. All of these are true.
Scalping activity arises when
A) the prices of goods are allowed to adjust to their equilibrium levels. B) the quantities of goods demanded and supplied are allowed to adjust to their equilibrium levels. C) the prices of goods are restricted to levels above equilibrium prices. D) the prices of goods are restricted to levels below equilibrium prices.