A demand curve for a normal good
A) slopes upward and to the right.
B) is constructed based on the assumption that income is rising.
C) is constructed based on the assumption that an inverse relationship exists between price and income.
D) shows the inverse relationship between price and quantity demanded.
Answer: D
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Perfectly competitive firms produce up to the point where the price of the good equals the marginal cost of producing the last unit. This condition is referred to as
A) allocative efficiency. B) constant returns to scale. C) perfectly competitive efficiency. D) productive efficiency.
Net export spending is expenditures on:
A. goods and services by federal, state, and local governments. B. goods and services sold abroad minus goods and services produced abroad. C. stocks, bonds, and other financial instruments. D. consumer durables, nondurables, and services.
What is typically the main cost of pursuing a college education?
A) tuition B) room and board C) books and supplies D) income forgone by not working
Suppose a city has 20 citizens. The first 10 citizens each derive marginal benefit from traffic lights according to the function MB = 10 - Q, and the remaining 10 citizens each derive marginal benefit from traffic lights according to the function MB = 20 - Q. If traffic lights cost $20 each to produce, what is the efficient quantity of traffic lights?
A) 14 traffic lights B) 16 traffic lights C) 12 traffic lights D) 9 traffic lights