A graph can be used to illustrate the relationship between the price of compact discs and the quantity of compact discs demanded. If there is evidence that buyers' income also influences the demand for compact discs, then a movement along the curve can be caused by a change in the price of compact discs
a. True
b. False
Indicate whether the statement is true or false
True
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A flat LM curve implies that
A) an increase in government spending will change output by a relatively small amount. B) a decrease in taxes will change output by a relatively small amount. C) changes in government spending and taxes will have a large multiple effect on output. D) A and B.
Name brand apparel has many substitutes and can get very expensive. As a result, their demand is likely to be
A. elastic. B. unit elastic. C. perfectly elastic. D. inelastic.
To say that turnips are inferior goods means that the income elasticity
A) is definitely greater than 1. B) is definitely between 0 and 1. C) is positive but could be greater than or less than (or equal to) 1. D) is negative.
Public goods are
A) under provided by the private market because the marginal cost of production is too high. B) under provided by the private market because the marginal benefits of consumption are too low. C) under provided by the private market because people's willingness to pay for the good is less than the marginal benefit of the good. D) over provided by the private market because the marginal benefits of consumption are too high.