What is a Giffen good?
What will be an ideal response?
A Giffen good is something consumers buy more of when its price rises and buy less of when its price falls.
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When the U.S. price level increases, economists predict a:
A. movement down along the aggregate demand curve. B. shift straight up of the aggregate demand curve. C. shift to the right of the aggregate demand curve. D. decrease in expenditure.
The textbook makes the analogy: economic forecasting is a lot like
a. meteorology b. casino gambling c. groping in the dark d. experimental physics e. mathematics
If there was a federal budget surplus and the government decided to either increase spending or decrease taxes,
A. The budget surplus would get smaller. B. The budget surplus would remain unchanged. C. The budget surplus would get larger. D. None of the choices are correct.
When a second firm enters a monopolist's market:
A. the former monopolist's average cost decreases as its output level decreases. B. the demand curve the former monopolist faces shifts to the left. C. the market price rises as the average cost increases. D. None of these