The law of demand states that:
A. as the price of a good increases, more units are demanded.
B. there is a direct relationship between the price of a good and the quantity of the good produced.
C. there is a negative relationship between the price of a good and the quantity of the good demanded.
D. there is an increase in the need for a good as the price of the good increases.
Answer: C
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
If marginal cost is rising, then average cost must be rising
a. True b. False Indicate whether the statement is true or false
For an economy as a whole,
a. the market value of production must equal expenditure. b. investment must equal the value of stocks and bonds purchased. c. wages must equal income. d. consumption must equal saving.
Which of the following is an example of an efficiency wage?
a. a high wage paid to compensate for dangerous work such as coal mining b. an above-equilibrium wage offered by a firm to attract a more talented pool of job applicants c. a wage below the minimum wage but supplemented by customer tips d. a high wage paid to a college graduate for a high-skill job such as electrical engineering