Answer the following statements true (T) or false (F)
1. Price elasticity of demand tends to be greater for substitute items than for complementary goods.
2. If income increases and the demand for a product increases, the product is a normal good.
3. The more substitutes for a good, the more elastic its demand tends to be.
4. The total quantity of a good offered for sale is unaffected by estimates by sellers of the probable costs of producing the good in the future.
5. The total quantity of a good offered for sale is unaffected by estimates by sellers of the probable costs of producing the good in the future.
1. TRUE
2. TRUE
3. TRUE
4. FALSE
5. TRUE
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Using rate-of-return analysis to determine who benefits and who does not benefit from the current structure of Social Security is
A. embraced by all. B. embraced not only by financial planners but also by most economists. C. rejected by those that view the program as social insurance rather than as an investment. D. rejected by everyone.
Where does a monopolistic competitive firm determine its quantity?
a. Price equals marginal revenue b. Price equals marginal cost c. Marginal revenue equals marginal cost d. Marginal revenue equals average total cost
A central bank's setting (or altering) of the money supply is known as
a. open-market operation. b. interest rate policy. c. monetary policy. d. employment policy.
Weighted least squares estimation is used only when _____.
A. the dependent variable in a regression model is binary B. the independent variables in a regression model are correlated C. the error term in a regression model has a constant variance D. the functional form of the error variances is known