When the price level rises unexpectedly, some businesses may mistake part of the increase for an increase in the price of their product relative to others and so decrease their production
a. True
b. False
Indicate whether the statement is true or false
False
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The law of supply states that:
a. there is a negative relationship between the price of a good and the quantity of it purchased by suppliers. b. there is a positive relationship between the price of a good and the quantity that buyers choose to purchase. c. there is a positive relationship between the price of a good and the quantity of it offered for sale by suppliers. d. at a lower price, a greater quantity will be supplied.
Refer to Figure 7-16. Producer surplus amounts to $300 if the price of the good is
a. $300
b. $350
c. $400
d. $450
Which of the following statements best characterizes Say’s law?
a. Supply does not automatically create an adequate demand. b. Wages and prices are inflexible downward. c. All income generated from output is used to buy goods and services. d. Full employment cannot be maintained for a long period of time.
Refer to the above figure. At a price of $6, excess quantity supplied equals
A. 15. B. 12. C. 0. D. infinity.