If a producer offers a price that is in excess of a consumer's valuation of the good, the consumer:
A. must revalue the good.
B. will refuse to purchase the good.
C. must buy the good at that price.
D. None of the statements associated with this question are correct.
Answer: B
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The substitution effect of a price change refers to
A) the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes. B) the shift in the demand curve due to a change in purchasing power brought about by the price change. C) the movement along the demand curve due to a change in purchasing power brought about by the price change. D) the shift of a demand curve when the price of a substitute good changes.
Keynesian economists argue that monetary policy works through its effects on:
a. interest rates and investment. b. price- and wage-flexibility. c. budget deficits and trade deficits. d. the spending and money multipliers.
Select whether the statement is true or false.
Macroeconomics and microeconomics are concerned with the well-being of only people with jobs and high incomes; they just examine it from a different perspective. A. True *B. False
A higher income level does not affect the budget constraint
a. True b. False Indicate whether the statement is true or false