macro economics

Which of the following statements is correct?

An increase in the price of C will decrease the demand for complementary product D.

A budget line is a graph that shows the various combinations of two products that a

Consumer can buy with a given amount of money income

In which of the following instances is the effect on equilibrium price dependent on the magnitude of the shifts in supply and demand?

Demand rises and supply rises

A nation's consumption is strictly limited by its production possibilities, even with international trade. t/f

False

A reduction in the unemployment rate will cause the nation's production possibilities curve to shift outwards.

False

Producing a good in the least costly way is known as allocative efficiency. t/f

False

A nation can increase its production possibilities by

Improving labor productivity

A point outside (to the right of) the production possibilities curve of a nation:

Is not attainable for this nation

Consumers express self-interest when they:

Seek the lowest price for a product

A movement from one point to another along the production possibilities curve would imply that:

Society is producing a different combination of outputs

Which of the following would most likely increase the demand for gasoline?

The expectation by consumers that gasoline prices will be higher in the future.

A government tax per unit of output reduces supply. t/f

True

A person should consume more of something when its margina

benefit exceeds its marginal cost.

A shift to the right in the demand curve for product A can be most reasonably explained by saying that:

consumer preferences have changed in favor of A so that they now want to buy more at each possible price.

(Consider This) At fast-food restaurants

decisions entail comparisons of marginal costs and marginal benefits.

If Z is an inferior good, an increase in money income will shift the:

demand curve for Z to the left.

If products A and B are complements and the price of B decreases, the:

demand for A will increase and the quantity of B demanded will increase.

A decrease in supply of X increases the equilibrium price of X, which reduces the demand for X and automatically returns the price of X to its initial level. t/f

false

Assume in a competitive market that price is initially below the equilibrium level. We can predict that price will:

increase, quantity demanded will decrease, and quantity supplied will increase.

The demand curve shows the relationship between:

price and quantity demanded.

A decrease in the demand for recreational fishing boats might be caused by an increase in the:

price of outboard motors.

The law of supply indicates that, other things equal:

producers will offer more of a product at high prices than at low prices.

(Consider This) The assertion by economists that "there is no free lunch"

remains true even for goods given away free by firms.

If products C and D are close substitutes, an increase in the price of C will:

shift the demand curve of D to the right.

A country can achieve some combination of goods outside its production possibilities curve by:

specializing and engaging in international trade

At the point where the demand and supply curves for a product intersect:

the quantity that consumers want to purchase and the amount producers choose to sell are the same.