The increase in the demand for widgets, shown in the figure above, is the result of an increase in the price of McBoover devices. Therefore
A) widgets and McBoover devices are substitutes.
B) widgets and McBoover devices are complements.
C) widgets are a normal good.
D) McBoover devices are a normal good.
A
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A firm's marginal revenue is defined as
a. the ratio of total revenue to total quantity produced. b. the additional output produced by lowering price. c. the additional revenue received due to technical innovation. d. the additional revenue received when selling one more unit of output.
Specialization in production is important primarily because it:
A. results in greater total output. B. allows society to avoid the coincidence-of-wants problem. C. allows society to trade by barter. D. allows society to have fewer capital goods.
Refer to the above diagram. When output decreases from Q1 and the price level increases from P1, then this change will:
A. be caused by a shift in the aggregate supply curve from AS1 to AS3. B. result in a movement along the aggregate demand curve from e2 to e1. C. be caused by a shift in the aggregate supply curve from AS2 to AS1. D. result in a movement along the aggregate demand curve from e1 to e2.
Suppose that a market for a product is in equilibrium at a price of $5 per unit. At any price above $5 per unit:
A. there will be an excess demand for the product. B. there will be an excess supply of the product. C. the quantity supplied of the product will be less than the quantity demanded of that product. D. there will be a shortage of that product.