Deb's income has just risen from $950 per week to $1,050 per week. As a result, she decides to increase the number of movies she attends each month by 5 percent. Her demand for movies is
A) represented by a vertical line.
B) represented by a horizontal line.
C) income elastic.
D) income inelastic.
D
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The table above gives data for the nation of Pearl, a small island in the South Pacific. If aggregate demand increases so that the quantity of real GDP demanded is $6 billion more at each price level, the new equilibrium real GDP is
A) $34 billion. B) $31 billion. C) $28 billion. D) $25 billion. E) $23 billion.
If individuals have money illusion, they react to changes in certain prices without regard to simultaneous changes in other prices
Indicate whether the statement is true or false
Which of the following characteristics would describe a product with an elastic demand?
A. The good is considered a necessity and many substitutes for the product exist. B. The good is considered a necessity and few substitutes for the product exist. C. The good is considered a luxury and many substitutes for the product exist. D. The good is considered a luxury and few substitutes for the product exist.
Why is the equilibrium price the best deal available for both buyers and sellers?
What will be an ideal response?