The demand curve shows the relationship between:
A. money income and quantity demanded.
B. consumer tastes and the quantity demanded.
C. price and production costs.
D. price and quantity demanded.
Answer: D
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Assuming the market is in equilibrium in the graph shown with demand D and supply S1, total surplus is:
A. greater than total surplus when market is in equilibrium at D and S2.
B. less than total surplus when market is in equilibrium at D and S2.
C. the same as total surplus when market is in equilibrium at D and S2.
D. zero.
Because of a late night out with friends, Ayana decided to sleep in rather than attend her 8 a.m. economics class. According to economic analysis, her choice was
a. irrational, because economic analysis suggests you should always attend classes that you have already paid for. b. irrational, because oversleeping is not in Ayana's self-interest. c. rational only if Ayana has not missed any other classes. d. rational if Ayana values sleep more highly than the benefit she expects to receive from attending the class.
Which of the following would generally cause firms to expand output in the short run?
a. a proportional increase in the prices of goods and services and the costs of producing them b. higher profit margins as the result of an unexpected increase in the prices of goods and services c. an unexpected reduction in aggregate demand d. an increase in wages and the prices of other resources
Which of the following is true of the business cycle record of the United States?
A. Recessions have been lengthier during the last two decades than was true prior to 1980. B. Real GDP contracted throughout most of the 1950s. C. Real GDP in 2000 was approximately the same as 1950. D. Since 1950, the fluctuations in GDP have been less severe than before 1950.