What would be the direct effect of a reduction in the U.S. selling price of Japanese-made cars on the U.S. demand for Japanese-made cars?
A) No effect, because price changes affect quantity demanded, not demand.
B) The demand would decrease.
C) The demand would increase.
D) We cannot tell unless we know the elasticities of demand for Japanese-made and American-made cars.
E) We cannot tell unless we know whether more cars can be imported from Japan.
A
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a. change in total costs divided by quantity produced b. change in total costs divided by change in quantity produced c. (fixed costs plus variable costs) divided by change in quantity produced d. (fixed costs plus variable costs) divided by quantity produced
According to Keynesian theory, the most important determinant of saving and consumption is
A) the stock of durable goods in the consumer's possession. B) the stock of liquid assets. C) the level of real disposable income. D) the level of consumer indebtedness.