Which of the following will not cause a change in the demand for product A?
A. a change in the price of A
B. a change in consumer incomes
C. a change in tastes
D. a change in the number of buyers
Answer: A
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Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described, if the market price of hammers decreased from $15 to $13, which of the following can be said with certainty?
A. Only Bob's Hardware will experience a drop in producer surplus. B. Bob's Hardware would continue to participate in the market. C. Bob's Hardware would no longer participate in the market. D. Total producer surplus would decrease.
If the government sets a specific tax and an ad valorem tax so that they raise the same amount of tax revenue, why does the ad valorem tax reduce output less than the specific tax?
What will be an ideal response?
During hyperinflations
A) the value of money rises rapidly. B) money no longer functions as a good store of value and people may resort to barter transactions on a much larger scale. C) middle-class savers benefit as prices rise. D) money's value remains fixed to the price level; that is, if prices double so does the value of money.
In the above figure, what happens to the firm's optimal level of output if the price it receives for its product decreases from P4 to P3?
A) Output stays the same. B) Output decreases. C) Output increases. D) There is not enough information provided to know what happens to output.