Refer to the accompanying figure. If the price of this good is initially $3, and price falls by a few cents, then what will happen to total expenditure on this good?
A. Total expenditure will rise.
B. Total expenditure will fall to 0.
C. Total expenditure will not change.
D. Total expenditure will fall.
Answer: D
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Which of the following items is NOT part of government expenditure on goods and services in the GDP accounts?
A) gasoline purchases for government car pools B) Social Security expenditures C) new computer hardware for use by the IRS D) drapes to brighten up the president's office
Under the kinked demand curve model, a small increase in marginal cost will lead to
A) an increase in output level and a decrease in price. B) a decrease in output level and an increase in price. C) a decrease in output level and no change in price. D) neither a change in output level nor a change in price.
Explain how the short-run supply curve of the competitive firm is derived
If the data show that periods of high economic growth rate accompanied by high inflation rates, then changes in aggregate demand are the primary source of economic fluctuations
a. True b. False Indicate whether the statement is true or false