Suppose that in 2007, Ford sold 500,000 Mustangs at an average price of $18,800 per car; in 2008, 600,000 Mustangs were sold at an average price of $19,500 per car. These statements:
A. suggest that the demand for Mustangs decreased between 2007 and 2008.
B. suggest that the supply of Mustangs must have increased between 2007 and 2008.
C. suggest that the demand for Mustangs increased between 2007 and 2008.
D. constitute an exception to the law of demand in that they suggest an upsloping demand
curve.
Answer: C
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Countries that borrow large amounts of money from foreign lenders prefer to:
A) hold an undervalued currency. B) hold an overvalued currency. C) have a high rate of unemployment. D) have a low rate of inflation. Suppose India borrows $10,000 from the U.S. at the beginning of 2012. The flexible exchange rate is 50 Indian rupees per dollar.
If one country has higher inflation than another, its exchange rate should depreciate.
Answer the following statement true (T) or false (F)
Which of the following would best be a brief definition of present value?
A. Assets minus liabilities incurred to acquire the assets B. Benefits of an minus its costs C. The sum of all the past values of an asset D. The current value of the expected future returns on an asset
In Figure 1.1, which labeled points represent the existence of unemployment?
A. only A B. only B and C C. only D D. A, B, and C