Why does an increase in the price level tend to cause the consumption function to shift downward?
a. An increase in the price level decreases disposable income.
b. An increase in the price level increases the demand for fixed money assets.
c. An increase in the price level decreases the value of fixed money assets.
d. An increase in the price level decreases saving and increases debt.
c
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Holmes and Rahe created a Social Readjustment Rating Scale illustrated in the book. They say stresses can mount up leading to:
a. suicide b. illness c. alcoholism d. smoking addiction
The welfare loss of monopoly is also called
a. converted consumer surplus b. deadweight loss c. economic profit under monopoly d. producer surplus e. contestable profit
Based on the table for total, marginal, and average revenue, at what output quantity is total revenue maximized?
a. 1
b. 2
c. 3
d. 4
Which of the following observations is not true?
a. Demand curve of the perfectly competitive firm is perfectly elastic. b. There is only one price for a product in a perfectly competitive market. c. A firm in a perfectly competitive market can sell as much as it wants at market price. d. Demand curve of the perfectly competitive industry is perfectly elastic.