When the price of a good rises, people:
A. generally buy more of the good.
B. tend to buy cheaper substitutes instead.
C. rarely buy cheaper substitute goods instead.
D. typically do not decrease their consumption of the good.
Answer: B
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China's government runs a budget surplus. As a result,
A) saving will exceed investment. B) if there is no Ricardo-Barro effect, the supply of loanable funds curve lies to the right of the private supply of loanable funds curve. C) the quantity of loanable funds decreases. D) interest rates should increase. E) the Ricardo-Barro effect predicts that the real interest rate will increase.
Diseconomies of scale occur when
A) long-run average costs fall as a firm expands its plant size. B) long-run labor costs rise as a firm increases its output. C) short-run average costs rise as a firm expands its plant size. D) long-run average costs rise as a firm increases its output.
The basis for free trade is the concept of
A) absolute advantage. B) differences in natural resources and climate. C) differences in nominal wages. D) comparative advantage.
What mechanism will be established for the PPACA so that individuals can buy health insurance?
What will be an ideal response?