Suppose we observe people buying more of a good even though its price has risen. What would an economist conclude?
A) Impossible! We will never observe prices and quantity simultaneously rising in the real world.
B) The demand curve for the good must be upward-sloping.
C) The law of demand doesn't hold.
D) The demand curve has shifted to the right.
E) Consumption increasing as prices increase only occurs when a good is needed for survival.
D
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Suppose the equilibrium price in a perfectly competitive industry is $10 and a firm in the industry charges $12. Which of the following will happen?
A) The firm will sell more output than its competitors. B) The firm will not sell any output. C) The firm's revenue will increase. D) The firm's profits will increase.
Which of the following would not shift the demand for pounds curve to the right?
a. An increase in real U.S. GDP. b. A decrease in U.S. interest rates. c. A decrease in real U.S. GDP. d. An increased taste for British goods by Americans. e. None of the above.