Refer to Figure 10-6. Which diagram demonstrates a decrease in total utility following an increase in the price of candy?
A) the movement from e to d in Panel A
B) the movement from g to f in Panel B
C) the movement from k to h in Panel C
D) none of the above
C
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Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back. What is the reason for this price discrepancy?
a. Airlines are practicing imperfect price discrimination to raise their profits. b. Airlines charge a different rate based on the different nature of peoples' travel needs. c. Airlines are attempting to charge people based on their willingness to pay. d. All of the above are correct.
The recessionary GDP gap will differ from the AD shortfall when the
A. Multiplier effect lowers spending. B. Multiplier effect raises spending. C. Aggregate supply curve slopes upward. D. Budget is balanced.
Many economists consider medical care a superior good. Which of the following statements is true regarding a superior good?
a. When the price of a superior good increases, consumers demand more of it. b. Superior goods are considered necessities. c. A superior good has an income elasticity of demand less than one. d. Consumers want more of a superior good regardless of its price. e. As consumer income increases, a larger percentage of that income is spent on superior goods
If the United States is a "net lender" abroad, ________. (Assume that the capital account is zero and net transfers are zero.)
A) the United States must be exporting less than it is importing B) net foreign investment must be negative C) national saving is greater than domestic investment D) net capital flows must be positive