Figure 4.3 illustrates the demand for tacos. Assume tacos are a normal good. An increase in income would bring about a movement from
A) point a to point b. B) point c to point b. C) D2 to D1. D) D0 to D1.
D
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Which of the following statements is TRUE?
A) A monopoly cannot set price and quantity such that the point lies above the demand curve. B) A monopoly can charge whatever it wants. C) Profit maximization occurs by setting price first. D) Both A and B.
Investment spending might be larger when GDP is higher. Such added investment as GDP rises is called
a. mutual investment. b. induced investment. c. positive investment. d. net investment.
When an increase in government purchases causes firms to purchase additional plant and equipment, we have seen a demonstration of
A. the multiplier effect. B. supply-side economics. C. the crowding-out effect. D. the investment accelerator. E. none of these answers.
At the competitive equilibrium quantity supplied equals quantity demanded in all markets
Indicate whether the statement is true or false