At a price of $4.95, a pulp fiction novel is expected to sell 9,000 copies. If the novel is offered for sale at a price of $3.95, then the publisher can expect to sell
a. It is impossible to predict the effect of a lower price on sales.
b. less than 9,000 copies.
c. 9,000 copies.
d. more than 9,000 copies
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Refer to Edgeworth Box Economy. Analysis of an Edgeworth box economy shows that a competitive equilibrium
a. must be Pareto optimal. b. can be located anywhere along the contract curve. c. may lie anywhere within the region of mutual advantage. d. must lie to the southeast of the endowment point.
Diminishing returns to capital is a consequence of firms' incentives to use each piece of capital as productively as possible and illustrates the:
A. cost-benefit principle. B. principle of comparative advantage. C. principle of increasing opportunity costs. D. scarcity principle.
Which of the following is a range on the eclectic or general view of the aggregate supply curve?
a. Keynesian range. b. Intermediate range. c. Classical range. d. All of these.
Automatic stabilizers are government programs that:
a. exaggerate the ups and downs in aggregate demand without legislative action. b. bring expenditures and revenues automatically into balance without legislative action. c. shift the budget toward a deficit when the economy slows but shift it toward a surplus during an expansion. d. increase tax collections automatically during a recession.