Assuming that automobiles are normal goods, a rise in consumer income, other things being equal, will cause:
A. the demand curve for automobiles to shift to the left.
B. the demand curve for automobiles to shift to the right.
C. a downward movement along the demand curve for automobiles.
D. an upward movement along the demand curve for automobiles.
Answer: B
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Indicate whether the statement is true or false
If the price elasticity of demand for a good is less than one in absolute value, economists would characterize consumers of this good
A) as not very sensitive to price. B) as not very sensitive to the quantity they demand. C) as very sensitive to price. D) as elastic.
A monopolistically competitive firm that is earning profits will, in the long run, experience all of the following except
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