Exhibit 3-1 Market Demand
Suppose there are only three people in the economy: Jane, Harry, and Bob. The individual demand for corn for each of these consumers is given in Exhibit 3-1. The total quantity demanded of corn if the market price is $5 is
A. 3.
B. 25.
C. 17.
D. 26.
Answer: B
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If a firm can adjust its employment of all inputs, then it is
a. experiencing economies of scale. b. in the long run. c. off its expansion path. d. limited only by the capacity of its fixed capital.
A pure monopoly may generate economic profits because ________.
A. marginal revenue is constant as sales increase B. of barriers to entry C. of rising average fixed costs D. of advertising
An increase in demand is represented by a
A) shift of the demand curve to the left. B) shift of the demand curve to the right. C) movement down the demand curve. D) movement up the demand curve.
A car salesperson gives you four alternative ways to pay for your car. The first is to pay $18,000 today. The second is to pay $19,000 one year from today. The third is to pay $20,300 two years from today. The fourth is to pay $21,500 three years from today. If the interest rate is 6 percent, which payment option has the lowest present value and which has the highest?
a. The first is lowest; the second is highest. b. The second is lowest; the third is highest. c. The third is lowest; the fourth is highest. d. The fourth is lowest; the first is highest.