The law of demand
A. is only an assumption that cannot be tested.
B. does not apply to scarce goods.
C. only applies to necessities, not luxuries.
D. is consistent with human behavior in the world.
Answer: D
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Suppose GDP ________ the level of potential output. We would expect to see ________ unemployment, rising wages, and rising prices.
A. exceeds; low B. is? below; low C. is? below; high D. exceeds; high
Demand-pull inflation is illustrated in the short run aggregate supply-aggregate demand model as a shift of the aggregate ________.
A. demand to the left B. demand to the right C. supply to the left D. supply to the right
Purchases of inventories by
A) firms are not counted in investment spending. B) firms are also counted in investment spending. C) households are also counted in investment spending. D) households and Firms are also counted in investment spending. E) foreign consumers are counter in investment spending.
A monopolistic competitive firm is inefficient because the firm:
a. is not maximizing its profit. b. is producing at an output where average total cost is not minimum. c. earns positive economic profit in the long run. d. none of these.