In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the
equilibrium quantity (Q) of X. Refer to the given information. An increase in income, if X is a normal good, will:
A. increase D, increase P, and increase Q.
B. increase D, increase P, and decrease Q.
C. increase S, increase P, and increase Q.
D. decrease D, increase P, and increase Q.
Answer: A
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Economic growth is severely impeded in economies
A) with a lack of clear property rights. B) with high rates of convergence. C) which encourage induced innovation. D) with a strong market system.
The purchase of a new scanner by a computer graphics business is included in which expenditure category of GDP?
a. consumption b. investment c. government purchases d. net exports
If the government wanted to offset the effect of a fall in consumer confidence on AD, it might: a. decrease government purchases. b. decrease taxes
c. increase taxes. d. do either a. or c.
Excludability matters because it:
A. allows owners to set an enforceable price on a good. B. allows consumers to control the price of a good. C. creates a perceived scarcity that allows the seller to keep the price artificially high. D. creates a perceived scarcity that causes buyers to have an inelastic demand for the good.