Supply curves generally slope upward because of all of the following reasons except one. Which is the exception?
a. Producers are willing to offer more of a good at higher prices.
b. A higher price attracts resources from less-valued uses.
c. Producers must be compensated for the rising opportunity cost of additional output.
d. Producers have a greater incentive to sell more as the price increases.
e. The price of a good usually must fall to induce an increase in quantity supplied.
E
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Which of the following is the best example of a perfectly competitive market?
A) farming B) diamonds C) athletic shoes D) soft drinks E) electricity distribution
Good A is a Giffen good. If the price of good A were to suddenly double, the income effect would cause the purchases of good A to increase by
A) more than double. B) exactly double. C) less than double. D) Any of the above are possible. E) none of the above