The supply curve illustrates that firms:
A. decrease the supply of a good when its price rises.
B. increase the quantity supplied of a good when its price rises.
C. increase the supply of a good when its price rises.
D. decrease the quantity supplied of a good when input prices rise.
Answer: B
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Elastic demand implies
A) that a one percent increase in price results in a smaller than one percent decrease in quantity demanded. B) that a one percent increase in price results in a larger than one percent decrease in quantity demanded. C) that a one percent cut in price results in a larger than one percent increase in quantity demanded. D) that a one percent decrease or increase in price induces no change in total revenue.
What is the likely result from a depreciation of a nation's currency when its economy is already operating at its full-employment level of output?
A. Net exports fall and contribute to demand-pull inflation B. Net exports rise and contribute to demand-pull inflation C. Net exports fall, but equilibrium GDP rises D. Net exports rise, but equilibrium GDP falls