When the supply of a good decreases, there will be a(n):
A. decrease in the quantity demanded.
B. increase in the quantity demanded.
C. decrease in buyers' reservation prices for the good.
D. decrease in demand.
Answer: A
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
The demand for capital by a firm is based on the demand for the product that the capital produces. This relationship is referred to as
A. cost minimization. B. resource utilization. C. derived demand. D. product demand.
Consumer equilibrium requires that the marginal utility per dollar spent be unequal for all goods
a. True b. False Indicate whether the statement is true or false
A stock has a current annual dividend of $6.00 per year and it is expected to grow by 3% (0.03) a year. It is expected that two years from now the stock will sell for $90.00 a share. If the interest rate is 5% (0.05), the dividend-discount model predicts the stock's current price should be:
A. $101.30 B. $94.30 C. $94.90 D. $93.29