The five most important variables that determine the level of consumption are
What will be an ideal response?
disposable income, wealth, expected future income, price level, and interest rate
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In perfect competition, when market demand decreases, explain how the price of the good and the output and profit of each firm changes in the short run
What will be an ideal response?
Suppose the domestic supply (QS) and demand (QD) for MP3 players in the United States is represented by the following set of equations:QS = -25 + 10PQD = 875 - 5PIf the United States can import MP3 players from the rest of the world at a per unit price of $50, what will be the total demand for MP3 players in the United States?
A. 475 B. 925 C. 550 D. 625
If the AD curve shifts rightward more than expected,
What will be an ideal response?
Using Figure 9.1, dissaving occurs at all income levels
A. Above $3,000 billion. B. Above $2,000 billion. C. Below $2,000 billion. D. Below $3,000 billion.