The law of demand assumes that as the price of a good increases,
a. people recognize that its price may be even higher in the future, so they buy now rather than later
b. consumers tend to shift their purchases to relatively cheaper substitutes
c. people will buy less of it in the hope that the good will be cheaper in the future
d. the consumer's money income increases, and he or she is less able to buy all goods, including the good whose price has increased
e. the consumer's money income decreases, and if the product is a normal good, more will be purchased
B
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If the government wants to decrease the quantity consumed of alcohol by 20%, what percentage of tax would they have to levy on alcohol consumption?
a. 20% b. 30% c. 40% d. 50%
Leakages are greater than injections when total planned expenditures exceed real GDP
a. True b. False Indicate whether the statement is true or false
The opportunity cost of an activity
a. depends on the individual's subjective values and opinions b. is the same for everyone c. must be calculated and known before undertaking that activity d. is irrelevant to decision making e. is not influenced by time costs
Consider a market characterized by the following inverse demand and supply functions: PX = 40 - 4QX and PX = 10 + 2QX. Compute the surplus received by consumers and producers.
A. $50 and $25, respectively. B. $40 and $20, respectively. C. $20 and $40, respectively. D. $25 and $25, respectively.