A supply curve shows the relationship between:
A) output and the total cost of production.
B) output and prices.
C) output and consumer income.
D) output and revenue.
B
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Fact: People use water for many different purposes, from drinking and cleaning to filling pools, balloons, and squirt guns. Economists acknowledge the multiple uses of water when they point out that
A) everybody needs water. B) water is a good with many alternative uses at the margin. C) the demand for water is completely inelastic—consumers are totally insensitive to changes in the price of water. D) nothing but water can be used to serve all the purposes water serves.
Figure 5-11
In Figure 5-11, a consumer is initially at point A. There is a price change and she moves to B. It follows that
a.
the demand for beer follows the law of demand.
b.
the demand for beer does not follow the law of demand.
c.
wine is an inferior good.
d.
the consumer is confused.