When a rise in the price of one item results in a decrease in the demand for another good, then the two goods are
A) substitute goods.
B) complementary goods.
C) inferior goods.
D) satisfying the law of supply.
B
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According to the text, the growth of service sector employment in the US has contributed to
a. higher unemployment rates in the postwar period. b. a slowdown in the growth of real wages during the postwar period. c. reduced economic stability in the postwar period. d. an increase in the power and membership of unions. e. All of the above.
A monopolist is able to sell 5 units of output at $2.50 per unit and 6 units of output at $3.50 per unit. It will produce and sell the sixth unit if its marginal cost is:
a. $8.90. b. $8.50. c. $8.35. d. $8.00.
Which of the following is an implication of the modern view of the Phillips curve?
a. Higher rates of inflation always lead to lower rates of unemployment. b. Higher rates of inflation always lead to higher rates of unemployment. c. If actual inflation exceeds the inflation rate anticipated by decision makers, unemployment will temporarily fall below the natural rate. d. If actual inflation exceeds the inflation rate anticipated by decision makers, unemployment will temporarily rise above the natural rate.
Using Figure 1.6, we know the production of 90 units of soda and 4 units of pizza is 
A. possible, but only if all resources were fully employed. B. impossible because we either do not have the resources or the technology. C. undesirable. D. possible, but there would be unemployed resources.