If the price of ice cream rose to $30 per gallon, consumers would purchase fewer gallons of ice cream than if the price were $4 per gallon. If the price of chocolate sauce fell to $0.50 per can, consumers would purchase more chocolate sauce than if the price were $5 per can. These relationships illustrate the
a. law of supply.
b. law of demand.
c. difference between normal and inferior goods.
d. difference between substitute and complement goods.
b
You might also like to view...
If a seller charges a buyer the exact price the buyer is willing to pay, then the buyer would
A) not buy the good. B) receive the maximum consumer surplus. C) receive no benefit from the good. D) receive no consumer surplus from that unit of the good. E) suffer a deadweight loss from buying the good.
Constant returns to scale occur when: a. long-run average total cost decreases with an increase in output
b. long-run average total cost increases with an increase in output. c. long-run average total cost remains constant with an increase in output. d. long-run average variable cost decreases with an increase in output.
?Which of the following is true of time series data?
A. ?The time series data is easier to analyze than cross-sectional data. B. ?The time series data are independent across time. C. ?The chronological ordering of observations in a time series conveys potentially important information. D. ?A time series data set consists of observations on a variable or several variables at a given time.
_______ is (are) the relationship between the maximum amounts of output a firm can produce and various quantities of inputs.
A. A production function B. The law of diminishing returns C. Economies of scale D. Diseconomies of scale