What is the difference between a change in demand and a change in quantity demanded?
A change in quantity demanded is caused by a change in the price of the product and is represented as a movement along a stationary demand curve. A change in demand is caused by a change in the determinants of demand and is illustrated as a horizontal shift of the entire demand curve.
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In the figure above, the elasticity of demand facing the monopoly equals one when it produces ________ units of output
A) h B) j C) k D) none of the above
The economy suffered a mild recession in 2001. Despite the recession, home sales and durable goods sales remained high. Which of the following is a plausible explanation?
A) The Fed caused a reduction in the federal funds rate to its lowest level in 40 years. B) Home building and consumer durable purchases are always high during a recession. C) Rising inflation encouraged many to invest in the real estate market. D) The Fed's pursuit of contractionary policy stimulated these markets.