The estimated demand for a good is
= 25 - 5P + 0.32M + 12PRwhere Q is the quantity demanded of the good, P is the price of the good, M is income, and PR is the price of related good R. If the price of the good falls by $4, the quantity demanded will ________ by ________ units.
A. increase; 50 units
B. decrease; 12 units
C. increase; 20 units
D. increase; 48 units
E. increase; 5 units
Answer: C
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A decrease in the nominal wage will cause the aggregate supply curve to
A. shift outward. . B. shift inward. C. become flatter D. become steeper. .
Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 27 pillows and 14 blankets would appear
A) along Billie's production possibilities frontier. B) inside Billie's production possibilities frontier. C) outside Billie's production possibilities frontier. D) at the vertical intercept of Billie's production possibilities frontier.
Government intervention will not be necessary when voluntary contracting internalizes an externality. Which of the following is NOT a necessary condition for this to occur?
A) well-defined private property rights B) low transaction costs C) large numbers of individuals involved in the transactions D) low contract enforcement costs
The slope of an indifference curve is called the
a. bliss gradient. b. happiness slope. c. average transformation rate. d. marginal rate of substitution.