Suppose that Jean normally orders three tacos, but on seeing that their price has gone up, decides to buy only two. Jean's decision is best explained by:
A) income and substitution effects.
C) the principle of comparative advantage.
B) the law of supply.
D) the law of increasing opportunity costs.
Ans: A) income and substitution effects.
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A mutual fund that purchases a wide variety of stocks will
A) eliminate systematic risk. B) minimize nonsystematic risk. C) minimize market risk. D) minimize default risk.
The total revenue received by sellers of a good is computed by
A. multiplying the price times the quantity sold. B. dividing the percentage change in quantity by the percentage change in price. C. adding the price and the quantity sold. D. multiplying the percentage change in price times the percentage change in quantity.
The branch of economics that focuses on economywide variables like inflation and unemployment is called:
a. macroeconomics. b. microeconomics. c. free-market economics. d. aggregate economics.
When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus
a. True b. False Indicate whether the statement is true or false