AP (Advanced Placement) Macroeconomics: Questions 538 - 540 of 750

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Question 538

Question

MCQ▾

Describe how a fall in the price of a Giffen good would lead to changes in its quantity demanded

Choices

Choice (5)Response

a.

As price falls, quantity demanded will fall as the positive i.e. overwhelms the negative SE

b.

As price falls, quantity demanded will also fall as substitution effect (SE) is positive and income effect (i.e.) is also positive

c.

As price falls, quantity demanded will fall as positive SE overwhelms the negative i.e.

d.

As price falls, quantity demanded will fall as SE and i.e. reinforce each other.

e.

Question does not provide sufficient data or is vague

Question 539

Question

MCQ▾

Backward bending labour supply curve is characterised by the following condition

Choices

Choice (5)Response

a.

Wage rate is high, i.e. is greater than SE

b.

Wage rate is low, SE is greater than i.e.

c.

Wage rate is low, i.e. is greater than SE

d.

Wage rate is high, SE is greater than i.e.

e.

Question does not provide sufficient data or is vague

Question 540

Question

MCQ▾

What is the optimal industry level of output in the case of a cartel with zero MC and linear demand curve?

Choices

Choice (5)Response

a.

b.

c.

d.

e.

Question does not provide sufficient data or is vague

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