The quantity of a good that consumers demand depends only on the price of the good
Indicate whether the statement is true or false
False. The quantity of a good demanded depends on many factors including: its own price, consumers' incomes, and the price of related goods.
You might also like to view...
Comment on the following statement: "A decrease in supply will lead to an increase in the price which decreases demand, thus lowering price. Therefore, a decrease in supply has no effect on the price of a good."
What will be an ideal response?
The regression R2 is a measure of
A) whether or not X causes Y. B) the goodness of fit of your regression line. C) whether or not ESS > TSS. D) the square of the determinant of R.
Suppose that you allow yourself $50 per month to spend on compact disks. You spend exactly this much every month regardless of the price of compact disks. Therefore, your demand for CDs
a. is elastic b. is inelastic c. is unit elastic d. cannot be characterized unless we know the price of a disk e. cannot be characterized unless we know the price and quantity of compact disks purchased
Opponents of tax reforms intended to raise saving argue that such reforms
a. favor those with high income, and that saving may not rise because of the substitution effect. b. favor those with high income, and that saving may not rise because of the income effect. c. favor those with low income, and that saving may not rise because of the substitution effect. d. favor those with low income, and that saving may not rise because of the income effect.