Given the price of a good or service, what determines how much a person is willing to pay for that good or service?
A) marginal utility
B) total utility
C) the substitution effect
D) average utility
Answer: A
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For each of the following changes, which equilibrium curve (IS, LM, or FE) is shifted? Draw the change in the underlying demand or supply curves (for example, money demand and supply for the LM curve) and show how the equilibrium curve changes
(a) Expected inflation increases. (b) The future marginal productivity of capital increases. (c) Labor supply decreases. (d) Future income declines. (e) There's a temporary beneficial supply shock. (f) The nominal interest rate on money rises.
A decrease in the productivity of labor will shift the demand curve for labor to the left, other things being equal
a. True b. False Indicate whether the statement is true or false