Assume that pizza and hamburgers are the only food items available to consumers. If the price of pizza increases, other factors constant, then which of the following will definitely happen?
A. Total revenues received by pizza sellers will increase
B. Total revenues received by pizza sellers will decrease
C. Total revenues received by hamburger sellers will increase
D. Total revenues received by hamburger sellers will decrease
C. Total revenues received by hamburger sellers will increase
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Refer to the scenario above. Suppose Edwin consumes the total output produced. What is likely to happen in this case?
A) GDP will remain unchanged. B) GDP will decrease. C) Trade surplus will increase by $200. D) GDP will increase.
The supply-of-money curve is almost perfectly inelastic because:
a. as interest rates rise, people will want to be supplied with more loans b. the Fed makes more money available in response to higher interest rates. c. banks generally find loans more profitable than keeping their assets as cash in their vaults or reserve deposits at the Fed, whether interest rates are 4% or 10%. d. the Fed lowers the discount rate as interest rates rise.
The law of diminishing marginal utility
a. is valid only after basic necessities (such as food and shelter) have been obtained b. says that marginal utility decreases as more of a good is consumed c. implies that spending on a good will decrease as more of that good is consumed d. says that marginal utility decreases as income increases e. implies that spending on a good decreases as income increases
According to Schumpeter, why don't competitive firms innovate?