In considering the relationships between price and quantity demanded, ceteris paribus directs the economist to assume that:
A. price increases affect quantity.
B. quantity increases affect prices.
C. neither price nor quantity affect demand.
D. all other variables remain unchanged.
Answer: D
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An efficiency wage ________ because ________
A) increases job rationing; the real wage rate is lowered below the equilibrium B) decreases job rationing; the real wage rate is lowered below the equilibrium C) is used often; it is inexpensive and effective D) increases job rationing; the real wage rate is raised above the equilibrium E) decreases job rationing; the real wage rate is raised above the equilibrium
The spending multiplier is:
a. 1 / (1 ? MPC). b. 1 ? MPC. c. MPC. d. MPC / (1 ? MPC).
In an effort to avoid recession, the government implements a tax rebate program, effectively cutting taxes for households. We would expect this to ________.
A. affect neither aggregate supply nor aggregate demand B. reduce aggregate supply C. reduce aggregate demand D. increase aggregate demand
Demand for the product of an industry in perfect competition is assumed to be inelastic.
Answer the following statement true (T) or false (F)