A demand curve for a normal good
A. is constructed based on the assumption that income is rising.
B. shows the inverse relationship between price and quantity demanded.
C. slopes upward and to the right.
D. is constructed based on the assumption that an inverse relationship exists between price and income.
Answer: B
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Suppose there is currently a shortage in the guitar market. Pick the correct statement
A) Quantity demanded exceeds quantity supplied. B) Sellers could sell all they plan to sell at the current price. C) The price of guitars would tend to increase. D) All of the above are true. E) None of the above is true.
Marginal cost is defined as:
A) the change in total cost due to a one unit change in output. B) total cost divided by output. C) the change in output due to a one unit change in an input. D) total product divided by the quantity of input.