While demand shifts have an effect on equilibrium price and quantity, supply shifts have no such effect.
Answer the following statement true (T) or false (F)
False
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Suppose coffee prices, gasoline prices, and concert ticket prices are all sharply higher this year compared to last year. The economy is experiencing
A) disinflation. B) deflation. C) inflation. D) possibly A, B, or C above.
In the Keynesian model when desired investment exceeds desired saving,
A) inventories rise. B) inventories fall. C) the price level rises. D) the price level falls.
The equation MRS = 1 + r means that ________
A) consumers prefer to avoid fluctuations in consumption B) at the margin, consumption grows at the real interest rate C) any movement along the budget constraint would cause a decrease in the consumer's utility D) consumer utility is a positive function of the real interest rate
Assuming elasticity of demand is reported as an absolute value, a price elasticity of demand of 0.4 indicates an:
A. elastic demand, meaning the percentage change in quantity demanded will be greater than the percentage change in price. B. inelastic demand, meaning the percentage change in quantity demanded will be greater than the percentage change in price. C. elastic demand, meaning the percentage change in quantity demanded will be less than the percentage change in price. D. inelastic demand, meaning the percentage change in quantity demanded will be less than the percentage change in price.