If the economy experiences a strong boom and consumers' incomes sharply rise, local stores with higher prices are ________ to have a(n) ________ in the number of customers.
A) likely; increase
B) likely; decrease
C) not likely; increase
D) not likely; change
A) likely; increase
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"Ceteris paribus" refers to the idea that if more than two variables are graphed, only one variable must be held constant
Indicate whether the statement is true or false
A price floor policy establishes a minimum price for a market. Which of the following results from a binding price floor?
A) Equilibrium B) Excess demand C) Excess supply D) Shortage
Whether or not deficits create a burden depends on how and why the government incurred the deficits in the first place. Explain
Suppose your firm is operating in a perfectly competitive market, and that the minimum average variable cost of producing your good is $30. If the price of the good is $32, your firm should:
A. not produce anything since the price is above the minimum of average variable cost. B. not consider price when determining the amount to sell. C. supply the amount of the good where the marginal cost of production is equal to $32. D. supply the amount of the good where the marginal cost of production is $30.