True, False, Explain. Classify the following statements as either True or False and provide a brief...

  

    
 

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True, False, Explain. Classify the following statements as either True or False and provide a brief justification to explain your choice. (a) Consumers will always buy more of a good with a lower price than a good with a higher price. (b) A firm has increasing marginal costs in the short run because it experiences diminishing marginal returns in production. (c) Real income decreases when the price of one good increases, ceteris paribus. (d) Medical care is an example of a public good. (e) A binding price floor in the labour market creates unemployment. (f) When the price of a good increases, if the income effect is negative, the good must be a normal good. (g) An increase in demand that leads to a higher equilibrium price and quantity is not consistent with the law of demand. (h) If the demand curve for one good shifts rightward when the price of another good falls, the cross-price elasticity between the two goods must be negative. (i) Monopolistically competitive firms experience zero profit in the long run. (j) Scarcity arises from limited resources, but this does not mean that every economic choice had an opportunity cost. True, False, Explain. Classify the following statements as either True or False and provide a brief justification to explain your choice. (a) Consumers will always buy more of a good with a lower price than a good with a higher price. (b) A firm has increasing marginal costs in the short run because it experiences diminishing marginal returns in production. (c) Real income decreases when the price of one good increases, ceteris paribus. (d) Medical care is an example of a public good. (e) A binding price floor in the labour market creates unemployment. (f) When the price of a good increases, if the income effect is negative, the good must be a normal good. (g) An increase in demand that leads to a higher equilibrium price and quantity is not consistent with the law of demand. (h) If the demand curve for one good shifts rightward when the price of another good falls, the cross-price elasticity between the two goods must be negative. (i) Monopolistically competitive firms experience zero profit in the long run. (j) Scarcity arises from limited resources, but this does not mean that every economic choice had an opportunity cost.

Answer rating: 100% (QA)

a False Consumers will not always buy more of a good with a lower price than a good with a higher price it depends on the preferences of the consumer ... View the full answer