In what ways can expectations change your demand for a product today?
What will be an ideal response?
Expectations about both future prices and future incomes may affect your demand for a product today. For example, if you expect the price of gasoline to rise tomorrow, you will want to fill up your car's gas tank today. Also, expectations about future incomes may affect purchases today. An individual who believes that he may soon be laid off from his job (and therefore see a drop in his income) will be unlikely to purchase a new car today.
You might also like to view...
Under which one of the following market structures are sellers most likely to consider the reaction of rival sellers when they set the price of their product?
a. Perfectly competition. b. Monopoly. c. Monopolistic competition. d. Oligopoly.
If a nation is going to achieve and sustain a high rate of economic growth, it must
a. prohibit low-wage foreign producers from supplying goods to the domestic market. b. have an abundant domestic supply of low cost energy resources. c. have a mechanism capable of attracting savings and channeling them into wealth-creating projects. d. impose regulations that will limit the intensity of competition among domestic firms.
Curve A is always declining because
a. marginal product first decreases, then increases b. of diminishing marginal product. c. we are dividing fixed costs by higher and higher levels of output. d. marginal product first increases, then decreases.
Economists argue that we can calculate the value of a human life by observing voluntary risks that people take every day
a. True b. False Indicate whether the statement is true or false