Using the indifference curve model, a demand for X curve is derived by allowing:
A. the price of Y to change and holding the price of X and income constant.
B. income to change and holding the price of X and the price of Y constant.
C. the price of X and the price of Y to change and holding income constant.
D. the price of X to change and holding the price of Y and income constant.
Answer: D
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If a firm is successful in its efforts to reduce the price elasticity of demand for its product, all else constant, the optimal markup that can be used in setting price will increase
Indicate whether the statement is true or false
Entrepreneurial judgment
a. is necessary to make business decisions when no fixed decision rule can be used. b. is fully incorporated into modern economic models of business behavior. c. requires decision makers to follow carefully defined rules regarding uncertainty, discovery, and business judgment. d. requires government advice and regulation.
Economics is a study of
A. how to run a business successfully. B. personal finance. C. how to make money in the stock market. D. the allocation of scarce resources.
'Reverse causality' means:
a) the value of two things move in the opposite direction b) the value of two things move in the same direction c) changes in 'A' most likely caused changes in 'B', yet someone concluded 'B caused A' d) 'A' happened before; 'A' happened again e) there is a 'spurious correlation' between 'A' and 'B'