Which of the following explains the downward slope of the aggregate demand curve?
a. disposable income remains unchanged when prices rise.
b. higher domestic prices encourage exports and discourage imports.
c. higher prices reduce the household’s real wealth.
d. All of these.
c. higher prices reduce the household’s real wealth.
You might also like to view...
If only two identical firms operate in a market, consumers prefer
A) a Cournot equilibrium. B) a Stackelberg equilibrium. C) a collusive equilibrium. D) any equilibrium since they all result in the same consumer surplus.
Two firms, A and B, are in the market and barriers to entry keep other firms from entering. The managers are involved in a Cournot oligopoly and the figure shows the best response curves for the two firms . In the Cournot equilibrium, Firm A produces ________ units per year and Firm B produces ________ units per year.
A) 250; 200 B) 400; 200 C) 250; 500 D) 200; 100
If a consumer is willing and able to pay $20 for a particular good and if he pays $16 for the good, then for that consumer, consumer surplus amounts to
a. $4. b. $16. c. $20. d. $36.
One In the News article is titled "Challenging Work and Corporate Responsibility Will Lure MBA Grads." In the headline, which of the following determinants of labor supply is most explicitly mentioned?
A. Prices of consumer goods. B. Tastes. C. Expectations regarding prices of consumer goods. D. Taxes.