Economic Theory States That More of a Good Is Supplied

question 34

Multiple Choice

Economic theory states that more of a good is supplied at a higher price than a lower one,yet the sales of digital cameras have increased while their prices have fallen.This statement

• A) reflects the fact that economics is not a precise science and its predictions are sometimes incorrect.
• B) merely illustrates that the digital camera market may be an exception to the general rule.
• C) applies only to the supply side and overlooks the tremendous increase in the demand for digital cameras.
• D) confuses changes in the quantity supplied with changes in supply.
• E) ignores the fact that the current price may be below the equilibrium level.

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Definitions:

Union Shop

A workplace where employees are not required to join the union to be hired, but must join shortly after commencing employment and remain members for as long as they are employed there.

Company Towns

Communities where nearly all stores and housing are owned by the one company that is also the main employer.

AFL

American Federation of Labor, a national federation of labor unions in the United States.

Samuel Gompers

An American labor union leader and a key figure in the founding of the American Federation of Labor (AFL).