If demand is inelastic, an increase in the price of a good will cause total revenue to:
a. fall.
b. remain constant since the decrease in quantity sold is exactly offset by the price increase.
c. rise.
d. rise if it is a normal good and fall if it is an inferior good.
c
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New Keynesians and new classical economists both believe that
a. people form their expectations rationally. b. aggregate demand movements primarily drive business cycles. c. individual agents engage in optimizing behavior. d. The key source of disagreement centered around how people form their expectations. e. all but d are correct.
The marginal productivity principle has some relevance to organizing production in a socialist society
a. True b. False Indicate whether the statement is true or false
In the above figure, the inflationary gap can correctly be identified as
A. LRAS minus SRAS. B. AD1. C. the difference between 125 and 120. D. the difference between 12.2 trillion and 12 trillion.
In the above figure, if the budget line is the line DF, the consumer will maximize utility at point
A. A. B. B. C. C. D. G.