Author Question: Identify the correct statement. a. If the price level increases, we feel poorer and buy less. b. If ... (Read 61 times)

TVarnum · **on:** Jun 30, 2018

Identify the correct statement.
a. If the price level increases, we feel poorer and buy less.
b. If the price level increases, we feel richer and buy more.
c. If domestic prices increase, we substitute domestic goods for imported ones.
d. An increase in the price of a particular good leads to a substitution.
e. A decrease in the price of a particular good is like an increase in income and therefore we buy more.

Question 2

The kinked demand curve:
a. applies when competitors match price decreases but not price increases.
b. could apply to market demand in any market structure.
c. applies when competitors match price increases but not price decreases.
d. applies to the price leadership model.
e. applies when competitors act independently.