The real-income and the substitution effects reinforce each other by
A. decreasing the consumption of good A when the price of good A increases.
B. increasing the consumption of good B when the price of A falls.
C. decreasing the consumption of good A when the price of good B falls.
D. increasing the consumption of both goods A and B when income increases.
Answer: A
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Other things equal, a decrease in autonomous consumption shifts the ________ curve to the ________
A) IS; right B) IS; left C) LM; left D) LM; right
Figure 8-5
In Figure 8-5, profits are maximized at output of
A. 10 B. 35 C. 50 D. 60
The income elasticity of demand for housing property is exactly 1.40 . Due to a recession, you expect incomes to drop by 5% next year. How will consumers adjust their purchase for housing property?
a. Buy 5% more houses b. Buy 5% fewer houses c. Buy 7% more houses d. Buy 7% fewer houses
Regarding forecasting, which of the following statements is NOT true? a. Operations managers need sales forecasts to plan future production
b. Financial managers need estimates of future sales revenues, disbursements & capital expenditures in order to plan effectively. c. Forecasts of credit conditions are needed to plan the cash needs of the firm. d. Public administrators and managers of NFP corporations need not forecast, since they need not make a profit. e. Both c and d are false.