Refer to Figure b. Suppose consumers choose to consume water in two different states, sunny weather, WS and during a hurricane, WH. As the consumer moves from point A to B along the indifference curve, the variability of consumption:
A. decreases.
B. increases.
C. remains constant.
D. increases for one good, but decreases for the other.
B. increases.
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For a single-price monopolist that is maximizing profit, the price is
A) less than marginal revenue. B) equal to marginal revenue. C) equal to marginal cost. D) greater than marginal cost.
Economic growth in India has averaged about 8.5 percent in recent years and while inflation averaged almost 9 percent. The AS-AD model shows this process as
A) rightward shifts in the short-run aggregate supply curve. B) rightward shifts in the both the aggregate demand and long-run aggregate supply curves. C) movements upward along the aggregate demand curve. D) rightward shifts in the aggregate demand curve and leftward shifts in the short-run aggregate supply curve.