If the demand curve is a vertical line, it means that:
A. regardless of price, the quantity demanded is a constant amount.
B. regardless of quantity, the price is a constant amount.
C. the good is inferior.
D. the good has many substitutes.
Answer: A
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An example of a macroeconomic model is one that considers
a. how the price of chicken influences the quantity of chicken bought. b. why the size of the total national output depends on the size of total spending. c. how the output of a product is influenced by the cost of production for the product. d. All of these.
The amount of corporate profits not paid out in dividends is known as
A. Retained earnings. B. The price/earnings ratio. C. The par value. D. Corporate stock.
?For firms operating in a perfectly competitive market, price must always be greater than marginal revenue.
Indicate whether the statement is true or false.
Refer to Figure 6.4. Suppose that the current price is set at B and Q2 units of a good are traded. Which of the following statements is incorrect?
A. The current market transaction is efficient. B. Total surplus would decrease should the price fall. C. Total surplus would increase should the price rise. D. The quantity demanded equals the quantity supplied.