From 2001 to 2005 there was a dramatic rise in the price of houses. If this rise made people feel wealthier, then it would have shifted
a. aggregate demand right.
b. aggregate demand left.
c. aggregate supply right.
d. aggregate supply left.
a
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All of the following are problems associated with maintaining a cartel except that:
a. cartels are illegal. b. a large amount of information is needed to coordinate a cartel. c. profits are not maximized by a cartel so it will evolve into a monopoly. d. each member of the cartel has an incentive to "chisel" by expanding output.
A 2 percent increase in the price of rice leads to a 2 percent decrease in the quantity demanded of rice. The absolute price elasticity of demand is
A) 3. B) 1. C) 0.1. D) 6.
A market situation in which a large number of firms produce similar but not identical products is
A) a collusive market structure. B) competitive monopoly. C) a homogeneous market. D) monopolistic competition.
Marginal utility is calculated as
A. total utility/change in number of units consumed. B. total utility/number of units consumed. C. change in total utility/number of units consumed. D. change in total utility/change in number of units consumed.