Consumers buy less of a good as its price increases because:
a. production costs have risen.
b. substitute goods are now relatively cheaper.
c. the income of consumers has effectively risen.
d. the higher price will make the good more valuable to each consumer.
b
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Executives should
A) spend an additional dollar on an activity if consumers value it by more than a dollar. B) do more of something if marginal revenue is positive. C) pend an additional dollar on an activity if consumers value it by less than a dollar. D) do more of something if average revenue is greater than zero.
An individual would suffer lower losses or maybe even gain from an unexpectedly higher inflation rate if
a. she held much currency and on net was a lender. b. she held much currency and on net was a borrower. c. she held little currency and on net was a lender. d. she held little currency and on net was a borrower.
As shown in the figure above, the rent ceiling
A) decreases consumer surplus. B) increases producer surplus. C) decreases deadweight loss. D) increases the quantity of housing rented. E) is efficient.
In the aggregate expenditures model, if aggregate expenditures (AE) equal $6 trillion and GDP equals $7 trillion, then:
a. inventory depletion equals ?$1 trillion. b. inventory accumulation equals $1 trillion. c. investment equals $1 trillion. d. investment equals ?$1 trillion.