When sketched as a function of disposable income, the investment demand curve is:
a. always horizontal.
b. always vertical.
c. upward sloping.
d. parabolic.
a
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In the long run, a reduction in productivity will cause
A) an increase in the capital—labor ratio and an increase in consumption per worker. B) an increase in the capital—labor ratio and a decrease in consumption per worker. C) a decrease in the capital—labor ratio and a decrease in consumption per worker. D) a decrease in the capital—labor ratio and an increase in consumption per worker.
Increased productivity in agriculture leads to lower prices for consumers and higher revenues for farmers
Indicate whether the statement is true or false
For two goods, X and Y, to be classified as substitutes, it must be the case that:
A. X and Y are identical. B. when the price of X rises, the demand for Y increases. C. when the price of X rises, the demand for Y decreases. D. consumers tend to purchase both items together.
A market is NOT contestable if:
A. existing firms cannot respond quickly to entry by lowering their price. B. there are sunk costs. C. consumers respond quickly to a price change. D. all producers have access to the same technology.