The law of demand implies that:
A) consumers are not responsive to price changes.
B) consumers will, all other things unchanged, buy more at lower prices.
C) sellers will, all other things unchanged, offer more on the market at higher prices.
D) sellers will, all other things unchanged, offer less on the market at lower prices.
Ans: B) consumers will, all other things unchanged, buy more at lower prices.
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If monetary policy must be used to set the market equilibrium value of the exchange rate equal to the official value, it:
A. is no longer available to stabilize the domestic economy. B. will be unable to stabilize the market equilibrium value of the exchange rate. C. will increase the rate of growth in the economy. D. will simultaneously stabilize the domestic economy.
If real GDP in 2002 is $10 trillion, and in 2003 real GDP is $9.5 trillion, then real GDP growth from 2002 to 2003 is
A) 0.5%. B) 5%. C) 0%. D) -5%.
Suppose a consumer's utility function is U(F0, F1) = F00.5F10.5, where F0 represents food consumed this year and F1 represents food consumed next year. For that utility function, the marginal utility of food consumed this year is 0.5 × (F1/F0)0.5 and the marginal utility of food consumed next year is 0.5 × (F0/F1)0.5. Suppose the consumer earns $100 this year and nothing in the next, food costs $1 per unit in both years, and the interest rate is 10%. How much food does she consume this year, and how much does consume tomorrow?
A. She consumes 45 units of food this year and 55 units of food next year. B. She consumes 50 units of food this year and 50 units of food next year. C. She consumes 55 units of food this year and 50 units of food next year. D. She consumes 50 units of food this year and 55 units of food next year.
In the health insurance field, asymmetric information creates problems _____ insurance contracts are signed; moral hazard causes problems_____ insurance contracts are signed
a. Before; before b. Before; after c. After; after d. After; before