Explain the effect of the following changes on equilibrium price and quantity of a commodity: (a) increase in average incomes. (b) increase in population
If average incomes rise, consumers will purchase more of most goods. That is, increases in income normally shift demand curves outward to the right. The equilibrium price and quantity both rise.
A larger population will presumably want to consume more of a commodity, even if the price of that commodity and average incomes do not change, thus shifting the entire demand curve to the right. The equilibrium price and quantity both rise.
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In the above table, if this is a perfectly competitive firm and the market price of the product is $5 and the marginal factor cost of labor is $60, how many units of labor will the firm hire?
A) 2 B) 3 C) 4 D) 6
Combining various goods and services into a convenient grouping is called
a. conglomeration. b. blending. c. congregation. d. agglomeration. e. aggregation.
By purchasing large amounts of mortgage-backed securities (MBS) in 2009, the Federal Reserve's goal was to
a. raise the price of MBS and raise their yields. b. raise the price of MBS and lower their yields. c. lower the price of MBS and raise their yields. d. lower the price of MBS and lower their yields.
Statistical correlation always implies causation.
Answer the following statement true (T) or false (F)