If the U.S. price level decreases, then
A. the expenditure schedule slope will flatten.
B. the expenditure schedule slope will become steeper.
C. shift the expenditure schedule upward.
D. shift the expenditure schedule downward.
Answer: C
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The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $3.62, then
A) there is a surplus of gasoline in Tulsa. B) there is a shortage of gasoline in Tulsa. C) the gasoline market in Tulsa is in equilibrium. D) without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. E) there is neither a surplus nor a shortage, but the market is NOT in equilibrium.
The demand for a good is elastic if
a. an increase in price leads to a decrease in total revenue b. an increase in price leads to an increase in total revenue c. an increase in price causes no change in total revenue d. total revenue is maximum e. total revenue is minimum
One possible solution to an incentive problem arising under unobservable actions is:
A. to be the boss and fire the inefficient worker and send a signal to others. B. to pay more and make the worker efficient. C. to sell the agent the right to the total production. D. to buy the agent's right to his total output.
Figure 9.6In Figure 9.6 if price is P1, then the industry will:
A. expand. B. contract. C. stay the same size. D. merge.