Pam graduates from law school and gets a position in a law firm. At the same time the price of hamburger falls while other food prices have stayed the same. She notices that she buys less hamburger than she did before. Is she violating the law of demand?
A. No, since other things are not held constant, such as her income.
B. Yes, since she is buying less hamburger at a lower price.
C. No, since the law of demand refers to relative price changes and the price of hamburger falling is an absolute price change.
D. Yes, since she is buying less hamburger in a relatively short period of time and we wouldn't expect her tastes to have changed.
Answer: A
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Jim is haggling with a car dealer over the sale price of a used car. When he entered the store, the storekeeper was already haggling with the other customer. His bargaining position could get worse if
a. The customer leaves b. Another customer enters the store, interested in the car c. He gets an offer from another seller d. All of the above
The law of demand states that price and ______________ are _____________ related, ceteris paribus
A) demand; inversely B) quantity demanded; inversely C) demand; directly D) quantity demanded; directly E) ?quantity supplied; directly
Figure 18-2
Figure 18-2 shows the widget market before and after an excise tax is imposed. The tax per widget equals ____.
A. $5 B. $20 C. $25 D. $30
An unexpected increase in total spending will cause an increase in GDP:
A. if prices are sticky. B. if prices are fully flexible. C. regardless of whether prices are sticky or fully flexible. D. only if prices are stuck in the long term.