The negative slope of the demand curve reflects the:
A. positive relationship between price and quantity.
B. proportional relationship between price and quantity.
C. inverse relationship between price and quantity.
D. inverse relationship between income and quantity.
Answer: C
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A speculative bubble causes
a. current prices to sink artificially low. b. current prices to rise artificially high. c. no current price changes, only possible future changes. d. undervaluing of stock prices.
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Suppose that Tracy and Pat start a business. Because of a series of bad decisions by Tracy, the company goes bankrupt, owing a total of $50,000. Tracy is penniless and Pat is a millionaire
If the company were organized as a partnership, Pat would be responsible for A) over $1 million of debt. B) $50,000 of debt. C) $25,000 of debt. D) $0 of debt.
In the long run, the price elasticity of demand is ________ than in the short run because ________
A) less; consumers have more time in which to make adjustments to price changes B) less; the percentage change is measured over a larger amount of time C) greater; consumers have more time in which to make adjustments to price changes D) greater; firms have more time to shift the burden of the tax forward to consumers