A firm produces and sells two goods, A and B. Good A is known to have many close substitutes; good B makes up a significant portion of most families' budgets. A price increase for each good would most likely cause total revenues from good A to:
A. Increase and total revenues from good B to decrease
B. Increase and total revenues from good B to increase
C. Decrease and total revenues from good B to increase
D. Decrease and total revenues from good B to decrease
D. Decrease and total revenues from good B to decrease
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Suppose that an economy is currently producing at a point that lies inside of its production possibilities set. Which of the following would best explain this circumstance?
A) The prevailing level of technology prevents the economy from producing at a point closer to the frontier of the production possibilities set. B) The economy does not have enough resources to produce at a point closer to the frontier of the production possibilities set. C) The economy is experiencing a high level of unemployment. D) Any of the above statements could explain this situation. E) None of the above statements could explain this situation.
In the market for money, an interest rate below equilibrium results in an excess ________ money and the interest rate will ________
A) demand for; rise B) demand for; fall C) supply of; fall D) supply of; rise
The horizontal segment of the aggregate supply curve:
a. shows that real GDP can increase only by affecting the economy's price level. b. shows that real GDP can increase without affecting the economy's price level. c. depicts a positive relationship between real GDP and the price level. d. depicts a negative relationship between real GDP and the price level. e. marks the full-employment level of real GDP.
The law of diminishing marginal utility helps explain: a. why most individual demand curves are straight lines. b. why most supply curves slope upward
c. why most individual demand curves slope downward. d. why marginal utility falls when total utility falls.