Why does quantity supplied increase when price increases?
a. Producers find it more profitable to make the item.
b. People "drop out" of the market, so buyers find it more abundant.
c. As demand decreases with a high price, surpluses appear.
d. All of the above.
a
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Suppose you learn that in 1900, households spent about 40 percent of their budget on food, and today, they spend about 10 percent of their budget of food. All else equal, this suggests that the price elasticity of demand for food:
A. is probably negative. B. is probably higher now than it was in 1900. C. is probably lower now than it was in 1900. D. has always been very high.
How are the roles of the household different in the goods market and in the factor markets?
What will be an ideal response?
As a consumer moves along an indifference curve:
A. prices and the consumer's budget are held constant, but total utility changes. B. total utility is held constant, but prices, quantities, and the consumer's budget may change. C. the consumer's budget is held constant, but prices change. D. prices are held constant, but the consumer's budget changes.
Internal economies of scale occur at the ________ levels.
A. plant and industry B. plant and firm C. firm and industry D. plant, firm, and industry