When the income elasticity of demand for a good is negative, one can correctly conclude that:
a. the good is a normal good.
b. the good is an inferior good.
c. the good is a substitute.
d. the good is a complement.
e. total revenue will decrease when the price increases.
b
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If the quantity demanded for a product exceeds the quantity supplied, the market price will rise until
A) the quantity demanded equals the quantity supplied. The product will then no longer be scarce. B) quantity demanded equals quantity supplied. The market price will then equal the equilibrium price. C) only wealthy consumers will be able to afford the product. D) quantity demanded equals quantity supplied. The equilibrium price will then be greater than the market price.
In the money market, an excess demand of money will:
A) increase the supply of bonds, increase bond prices, and decrease interest rates. B) increase the supply of bonds, decrease bond prices, and decrease interest rates. C) increase the supply of bonds, increase bonds prices, and increase interest rates. D) increase the supply of bonds, decrease bond prices, and increase interest rates.
The consumption function shows how ________
A) the marginal propensity to consume varies with disposable income B) income varies as a result of changes in consumption C) consumption depends on the decision to save D) all of the above E) none of the above
Economies of scale are often confused with
A) market demand curves. B) long-run average fixed cost curves. C) short-run average total cost curves. D) learning curves.