The maximum quantity of good Y that is affordable is:
A. M/PX.
B. M/Y.
C. M/X.
D. M/PY.
Answer: D
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For certain public projects such as building a dam on a river or a bridge to an island, what procedure is a government likely to use to determine what quantity of a public good should be supplied?
A) It hires economists to estimate the market demand for the product. B) It evaluates the costs and benefits of producing the good. C) It takes a vote in Congress. D) It conducts public surveys to determine if consumers want the product.
In the short-run, a supply shock will lead to
A) movement of prices and output in the same direction. B) movement of prices and output in opposite directions. C) a sustained inflation. D) a movement in prices, but not output.
A country with an undervalued currency
A. will have a balance of payments deficit. B. will accumulate reserves of foreign currencies. C. will suffer losses of foreign reserves. D. must intervene in the foreign-exchange market to buy its own currency.
If the quantities in the demand schedule in the table above were reduced by 2 units at each price, you would conclude that
A. demand increased.
B. demand decreased.
C. the demand curve shifted to the right.
D. both demand increased and the demand curve shifted to the right.