A demand curve that shows the relationship between the price of a good and the amount of the good consumed holding the consumer's income fixed and allowing their well-being to vary is called:
A. an uncompensated demand curve.
B. a compensated demand curve.
C. a Hicksian demand curve.
D. a derived demand curve.
A. an uncompensated demand curve.
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The movement of the budget line from BB to bb in the above figure suggests that income has:
A) increased and the price of X has decreased. B) fallen and the price of Y has increased. C) fallen and the price of X has decreased. D) decreased but there have been no price changes.
In the mid-1990s, Coke introduced a new soda in the soft drink market. Coke then used a new advertising campaign to associate the new soda with youth and strength. Coke was trying to:
A. shift the demand curve for competing soft drinks to the left. B. create a perfectly competitive market for soft drinks. C. maximize its per unit costs through advertising. D. lower the market price of soft drinks.
Are federal budget deficits related to trade deficits?
A. Yes. If U.S. consumers buy too many imported goods they don't have money to save and a budget deficit results. B. Yes, but only if the quality of U.S. goods and services is deteriorating. C. Yes. As deficit spending goes up, it is likely government borrowing will, too. Then foreign residents who lend funds to the U.S. government have less to spend on our goods, so U.S. exports will fall. D. No. The budget deficit is entirely a domestic matter while the trade deficit only affects U.S. citizens who travel abroad.
The substitution bias in the consumer price index refers to the idea that consumers ________ the quantity of products they buy in response to price, and the CPI does not reflect this and ________ the cost of the market basket
A) change; overestimates B) change; underestimates C) do not change; overestimates D) do not change; underestimates