If price falls, what happens to the demand for a product?
a. It increases.
b. It decreases.
c. It does not change.
d. Uncertain--economic theory has no answer to this question.
C
You might also like to view...
Suppose the economy is at point B. If firms expect profits will be higher in the future, to what point might the economy's move in the short run?
A) It stays at point B. B) It shifts to a point such as A. C) It shifts to a point such as C. D) None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.
Governments regulate natural monopoly by capping the price at _____
A. marginal revenue and allowing the monopoly to maximize profit B. marginal cost so that the monopoly is efficient and makes zero eco-nomic profit C. average total cost, which allows the monopoly to be inefficient but make zero economic profit D. the buyers' willingness to pay, which makes the monopoly operate efficiently
Assuming one can derive a correct input-output table, are there still any reasons to prefer the market to central planning?
Which of the following ideas is the most plausible?
a. Tax revenue is more likely to increase when a low tax rate is increased than when a high tax rate is increased. b. Tax revenue is less likely to increase when a low tax rate is increased than when a high tax rate is increased. c. Tax revenue is likely to increase by the same amount when a low tax rate is increased and when a high tax rate is increased. d. Decreasing a tax rate can never increase tax revenue.