Along a linear demand curve, as the price increases from zero,
a. demand decreases
b. demand increases
c. quantity demanded increases
d. total revenue first increases but eventually decreases
e. total revenue first decreases but eventually increases
D
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If grocery stores in high-crime areas charge higher prices than stores elsewhere, it is because
A) each item sold must bear its share of the higher insurance costs. B) residents of high crime areas tend to be less price-conscious shoppers. C) the costs of crime are a legitimate cost of doing business. D) the store owners are not setting marginal cost equal to marginal revenue. E) there is less competition between stores in high-crime areas.
In the Keynesian model, to understand the determination of income and employment it is necessary to understand
A) how aggregate supply is determined. B) how aggregate demand is determined. C) how long-run aggregate supply is determined. D) how interest rates are determined.