An increase in the price level in an economy will
What will be an ideal response?
decrease the quantity of real gross domestic product (GDP) demanded
"There is an inverse relationship between the price level and the quantity of real GDP demanded in an economy."
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The substitution effect of a price change refers to
A) the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes. B) the shift in the demand curve due to a change in purchasing power brought about by the price change. C) the movement along the demand curve due to a change in purchasing power brought about by the price change. D) the shift of a demand curve when the price of a substitute good changes.
Which if the following is the best example of a public good?
a. Bread. b. Fish in the ocean. c. Scrambled satellite broadcasts. d. National defense.
Suppose that buyers assume that there is a 30% chance of getting a plum, and 8 of 10 cars in the used car market are lemons. Is this an equilibrium?
What will be an ideal response?
Observations of real-world situations that appear to violate a consumer optimum could be offered as evidence favoring
A. diminishing marginal utility. B. bounded rationality. C. zero marginal utility at a utility-maximizing point. D. utility analysis.