If a monopolistically competitive firm lowers its price and, as a result, its total revenue decreases then
A) the output effect of the price change was less than the price effect.
B) the output effect of the price change was greater than the price effect.
C) the firm's demand curve must have decreased.
D) the substitution effect of the price change was greater than the income effect.
Answer: A
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The random walk theory of stock prices indicates that
a. if they are willing to do a little research, even beginning investors will be able to pick the stocks that will increase most in price in the future. b. managed mutual funds will persistently earn a higher rate of return than indexed funds. c. current stock prices already reflect information about factors influencing future stock prices that can be forecast with any degree of accuracy. d. stock market investors can expect to earn a steady real rate of return of about 7 percent annually.
Figure 3.4 illustrates the demand for tacos. If people expect the price of tacos to decrease in the near future, this would most likely bring about a movement from:
A. point a to point b. B. point c to point a. C. D2 to D0. D. D0 to D1.