The "law of demand" states that, other thing remaining the same, the higher
A) the price of a good, the lower is the demand for this good.
B) consumers' incomes, the greater is the demand.
C) the price of a good, the higher is the quantity demanded.
D) the price of a good, the smaller is the quantity demanded.
D
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A decrease in the price of one good results in a parallel shift in the budget line.
Answer the following statement true (T) or false (F)
If two economists disagree on an issue and their disagreement is based on personal value judgments, then this controversy is a normative one
a. True b. False
Given an initial allocation of resources that is off the consumption contract curve, in a perfect market environment without externalities and imperfect information,
A. one can end up at only one spot on the contract curve. B. both indifference curves could move to a higher level of utility. C. one can end up at any point on the contract curve. D. only one of the indifference curves could move to a higher level of utility.
Why do negative externalities like pollution result in inefficiency?
A. Because producers artificially restrict their supply. B. Because producers ignore the external costs they impose on third-parties. C. Because producers manufacture more goods than people can afford to buy. D. Because producers will receive an unequal distribution of profits.