When the relative price of a good increases, consumers respond by buying
a. a larger quantity of that good and a larger quantity of substitutes for that good.
b. a larger quantity of that good and a smaller quantity of substitutes for that good.
c. a smaller quantity of that good and a larger quantity of substitutes for that good.
d. a smaller quantity of that good and a smaller quantity of substitutes for that good.
c
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A decrease in the price of GPS systems will result in
A) a smaller quantity of GPS systems supplied. B) a larger quantity of GPS systems supplied. C) a decrease in the demand for GPS systems. D) an increase in the supply of GPS systems.
Short-run equilibrium output is the level of output at which actual output:
A. equals potential output. B. maximizes firm profits. C. equals planned aggregate expenditure. D. equals real GDP per capita.