Suppose the market for shoes consists of three consumers. The accompanying table shows the quantity demanded at various prices for each consumer:PricePer PairPairs Demandedby PatPairs Demandedby LeighPairs Demandedby Chris$100010$75031$50173$302105At $100 per pair, market demand:
A. is less than the quantity supplied.
B. intersects the x-axis.
C. intersects the y-axis.
D. is the same as Leigh's demand.
Answer: D
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For firms that sell one product in a perfectly competitive market, the market price is:
A. constant, regardless of quantity sold. B. equal to average revenue for a firm. C. equal to marginal revenue for a firm. D. All of these are true.
Which of the following describes a situation in which demand must be inelastic?
a. Total revenue decreases by 10 percent when the price of spats rises by 10 percent. b. Total revenue decreases by less than 10 percent when the price of spats rises by 10 percent. c. Total revenue increases by more than 10 percent when the price of spats rises by 10 percent. d. Total revenue decreases by $10 when the price of spats rises by $10. e. Total revenue decreases by more than $10 when the price of spats rises by $10.
Critics of Keynesian fiscal policy argue that deficit spending will not stimulate the economy, because higher interest rates will discourage consumption and investment. This argument is known as the:
a. deficit-substitution effect. b. multiplier effect. c. burden-of-debt effect. d. crowding-out effect.
The problem of determining what goods and services society should produce exists because:
A) resources are plentiful. B) resources are scarce. C) most of our resources are privately rather than socially owned. D) most of our resources are socially rather than privately owned.