In a market economy, the real power in the market place is held by the
a. producer
b. seller
c. government
d. consumer
Ans: d. consumer
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Figure 5-13
In Figure 5-13, the line AB is
A. an indifference curve. B. a budget line. C. a marginal utility curve. D. a demand curve.
Under a system of flexible exchange rates, a decrease in demand for a nation's currency in the foreign exchange market will: a. make it less expensive for foreigners to buy the nation's goods
b. make it more expensive for the nation to import goods. c. cause the nation's balance on current account to shift toward a deficit. d. all of the above
Microeconomics only looks at the behavior of one consumer or one firm in a market, while macroeconomics looks at the behavior of an entire industry or group of consumers
Indicate whether the statement is true or false
Which of the following is an example of the law of demand?
A) A decrease in the price of milk is followed by an increase in milk purchases.
B) A decrease in the price of milk is followed by a decrease in milk purchases.
C) An increase in the price of milk has no effect on the amount of milk purchased.
D) The amount of milk purchased increases when the price is constant.