Figure 3.4 illustrates the demand for tacos. Assume that tacos and beer are complements. An increase in the price of beer would bring about a movement from:
A. point a to point b.
B. point c to point b.
C. D2 to D1.
D. D0 to D2.
Answer: C
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The demand for wheat from farm A is perfectly elastic because wheat from farm A is
A) a perfect complement for wheat from farm B. B) a normal good. C) a perfect substitute for wheat from farm B. D) an inferior good.
Which of the following activities increases the demand for union labor?
A) a decrease in the minimum wage B) a decrease in immigration C) an increase in the union wage D) an increased desire by consumers to buy imports
Suppose the quantity of money is $1,000, the velocity of circulation is 6, and real GDP is $4,000. Then the price level is
A) 2.0. B) 2.5. C) 1.1. D) 1.5. E) 6.0.
For a perfectly competitive firm, average revenue is equal to
A) marginal cost. B) the market price. C) total revenue. D) average fixed cost.