The equilibrium point represents the only price-quantity combination in a market that
a. causes both buyers and sellers to agree to a price increase
b. causes both buyers and sellers to agree to a price decrease
c. exactly matches the independent plans of buyers and sellers
d. allows buyers to purchase what they want
e. allows sellers to earn a profit
C
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According to the interest rate effect, an increase in the price level, if other factors are held constant, will lead to
A) a reduction in total real spending on interest-rate-sensitive goods. B) an increase in the stock of real wealth held by the public. C) an outward shift of the aggregate demand curve. D) an increase in the real interest rate.
As the marginal propensity to consume (MPC) decreases, the spending multiplier:
a. increases. b. decreases. c. remains constant. d. becomes undefinable.
If resource A and resource B are substitutes of each other and the price of resource A increases, then:
a. the price elasticity of demand for resource B will increase. b. the demand for resource A will increase. c. the demand for resource B will increase. d. the price elasticity of demand for resource B will decrease. e. the demand for resource B will decrease.
In the case of a beneficial externality
a. marginal private cost is below marginal social cost. b. marginal social cost is above marginal private cost. c. marginal social cost and marginal private cost are equal. d. the free market price is below the socially efficient price.