Other Things Equal, in the Short Run a Higher Price

question 290

Multiple Choice

Other things equal, in the short run a higher price level leads households to

• A)increase consumption and firms to buy more capital goods.
• B)increase consumption and firms to buy fewer capital goods.
• C)decrease consumption and firms to buy more capital goods.
• D)decrease consumption and firms to buy fewer capital goods.

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Definitions:

Economy Of Scale

The cost advantage achieved by an increase in production, resulting in the reduction of costs per unit due to factors like operational efficiency.

Production Quantities

The amount of product that is produced within a specific period.

Microbusiness

A small business typically defined by having fewer than 10 employees and operating on a very small scale.

Diversity

The inclusion and representation of different groups of people, such as races, cultures, ages, and genders, within a community or organization.