An upward-sloping Engel curve indicates that
a. the good is normal.
b. the good is inferior.
c. demand for this good is elastic.
d. demand for this good is inelastic.
a. the good is normal.
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Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.
Which of the following both shift aggregate demand left?
a. a decrease in taxes and at a given price level consumers feel more wealthy b. a decrease in taxes and at a given price level consumers feel less wealthy c. an increase in taxes and at a given price level consumers feel more wealthy d. an increase in taxes and at a given price level consumers feel less wealthy
A firm that charges a very low price would be practicing predatory pricing if
A. the price allowed only a small profit. B. the price would only be profitable if it succeeded in driving a rival out of the market and prices increased afterward. C. the price allowed profits that were positive but below those earned by other firms. D. it only offered the low price to its rivals’ customers.
If a perfectly competitive apple farm's marginal revenue exceeds the marginal cost of the last bushel of apples sold, what should the farm do to maximize its profit?
A) increase output B) decrease output C) lower its price to sell more D) determine what the total revenue and total cost of production are