In year 1 the average price of X is $10, and in year 2 the average price of X is $23. If consumers buy more units of X in year 2 than in year 1, it follows that
A) the law of supply does not hold for good X.
B) demand for good X could be higher in year 2 than in year 1.
C) supply of good X could be less in year 2 than in year 1.
D) good X buyers have received an increase in income between year 1 and year 2, and good X is a normal good.
E) b and d
E
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The demand for gasoline in the short run is
A) elastic because people can easily switch to public transportation. B) inelastic because there are very few good substitutes for gasoline. C) perfectly inelastic because people have no choice but to buy gasoline. D) unit elastic because people tend to consume a stable amount of gasoline per period.
Like the supply curve for individual goods and services, the aggregate supply curve slopes upward and to the right.
Answer the following statement true (T) or false (F)
If the wage rate were $156, how many workers would be hired?
In Figure 1.6, if the opportunity cost of producing cars was zero at all levels of production, the production possibilities curve would be best be represented by a
A. Circle. B. 45-degree line starting at the origin. C. Vertical line. D. Horizontal line.