Suppose all prices decrease by 5 percent in the year while the total sales of laptops remain constant. This is
A) a violation of the law of demand since fewer laptops should be purchased at a higher price.
B) a violation of the law of demand since more laptops should have been purchased with higher incomes.
C) not a violation of the law of demand since the relative price of laptops did not change.
D) not a violation of the law of demand since the law of demand does not apply to expensive goods like laptops.
Answer: C
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In a market where firms are successful in convincing their customers that their product is different from their competitors' product but otherwise have no barriers to entry would be best characterized by
A) monopolistic competition. B) a monopoly. C) perfect competition. D) an oligopoly market.
If Slovenia is a small country in world trade terms, then if it imposes a large series of tariffs on many of its imports, this would
A) have no effect on its terms of trade. B) improve its terms of trade. C) deteriorate its terms of trade. D) decrease its marginal propensity to consume. E) increase its exports.
An increase in marginal cost that remains within the gap of the marginal revenue curve of a kinked demand oligopolist will:
a. keep price and output the same. b. raise price and decrease output. c. lower price and increase output. d. raise price and raise output. e. lower price and lower output.
"Ceteris paribus" is a Latin expression that essentially means "holding everything else constant."
a. True b. False Indicate whether the statement is true or false