The law of demand states that
A) consumers with more income will spend more on goods and services.
B) a higher price will lead to increased sales.
C) the price can never be too high for some consumers.
D) quantity demanded of a good will vary inversely with the price of that good.
Answer: D
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A risk-averse manager is hired to run a firm for shareholders. If the manager's effort can be observed and specified in a contract, which would be the best employment contract?
a. a high-powered incentive contract to elicit the most effort. b. a fixed salary paid as long as the required effort is undertaken. c. a proportion of profits paid as long as the required effort is undertaken. d. a wage well in excess of his or her outside opportunity.
Which of the following is a feature of a customs union?
a. The agreement only affects trade among members. b. The agreement only affects trade with nonmembers. c. The agreement establishes free trade among its members and a common trade policy with nonmembers d. The agreement provides mere guidelines and does not obligate members to any given policy. e. The agreement prohibits all tariffs.
Even if demand for a resource grows over time, ever-rising prices of the resource that result from its growing scarcity still discourage consumption
a. True b. False Indicate whether the statement is true or false
If an investment has a 20% (0.20) probability of returning $1,000; a 30% (0.30) probability of returning $1,500; and a 50% (0.50) probability of returning $1,800; the expected value of the investment is:
A. $1,433.33 B. $1,600.00 C. $1,550.00 D. $2,800.00