At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?
A. Yes, Martha is correct. Sam's demand has decreased.
B. No, Martha is incorrect. Sam's demand has increased.
C. No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed.
D. No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased.
Answer: C
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Refer to Table 2.4. What can be observed about the given resources?
A) Land is fixed but fertilizer is variable. B) Land and fertilizer are both fixed. C) Land is variable but fertilizer is fixed. D) Land and fertilizer are both variable.
A competitive market is in equilibrium. Then there is an increase in demand and an increase in supply. The equilibrium price ________, and the equilibrium quantity ________
A) rises; increases B) perhaps changes but we can't say if it rises, falls, or stays the same; does not change C) falls; increases D) perhaps changes but we can't say if it rises, falls, or stays the same; increases E) falls; perhaps changes but we can't say if it increases, decreases, or stays the same
Interest rate parity holds well in the Eurocurrency market
Indicate whether the statement is true or false
Which of the following would directly increase the capital stock of an economy?
A) An individual purchases shares of corporate stock B) An individual purchases high-risk corporate bonds C) A business firm expands its production facilities D) A bank uses cash reserves to purchase shorthand long-term government securities E) The government implements a spending program to cover prescription drugs for Medicare reciepts