If the demand curve facing a firm had a price elasticity of demand equal to zero and the firm raised its price, its total revenue would:
A. decrease slightly.
B. fall to zero.
C. not change.
D. increase.
Answer: D
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Which of the following helps explain why the aggregate quantity demanded of goods and services is inversely related to prices within the framework of the AD/AS model?
a. As prices fall, domestic consumers have an incentive to buy more of the cheaper goods and services. b. As prices fall, the monetary authorities will have to increase the money supply, which will lead to an increase in the quantity of goods and services purchased. c. As prices fall, the government will have to reduce taxes, which will lead to an increase in the quantity of goods and services purchased. d. As prices fall, the wealth of people holding the fixed quantity of money increases, causing them to expand their purchases of goods and services.
Refer to the information provided in Figure 26.8 below to answer the question(s) that follow.
Figure 26.8Refer to Figure 26.8. If the economy is currently at Point D producing output level Y2, which of the following is not true?
A. The economy is operating below full employment. B. Aggregate supply shifts to the right and the economy ends up at Point E. C. The economy is operating above full employment. D. Input prices are likely to fall.
A noisy party that keeps neighbors awake is an example of a
A) negative production externality. B) positive production externality. C) negative consumption externality. D) positive consumption externality. E) Both answers B and C are correct.
According to the above table, national income is
A. $2,465. B. $2,550. C. $2,190. D. $2,750.