Economists use general equilibrium models of an economy to explain
A) consumption levels.
B) production levels.
C) relative prices.
D) All of the above.
D
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If the price level rises, there is
A) a leftward shift of the demand for money curve. B) an upward movement along the demand for money curve and the curve does not shift. C) a downward movement along the demand for money curve and the curve does not shift. D) no movement along the demand curve for money and the curve does not shift. E) a rightward shift of the demand for money curve.
The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the consumer surplus?
A) $30 B) $9,000 C) $18,000 D) $16,000
You have just won a cash award of $500 for academic excellence
A) The substitution effect of this award will be larger than its income effect. B) The income effect of this award will be larger than its substitution effect. C) The substitution and income effects will be of identical size. D) It is impossible to know whether the substitution effect is larger than the income effect or vice versa.
A utility function is:
A. an equation for calculating the most utility a particular person can derive. B. an equation for calculating the total utility that a particular person derives from consuming a particular good over a particular time period. C. an equation for calculating the total utility that a group of people derive from consuming a particular good. D. an equation for calculating the total utility that a particular person derives from consuming a particular combination of goods and services.