Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n)
a. decrease in the demand for printers and a decrease in the quantity supplied of printers.
b. decrease in the supply of printers and a decrease in the quantity demanded of printers.
c. decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers.
d. increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.
a
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You explain to your friend Haslina, who runs a catering service called "Meals in a Zip," about an economic theory which asserts that consumers will purchase less of a product at higher prices than they will at lower prices
She contends that the theory is incorrect because over the past two years she has raised the price of her catered meals and yet has seen a brisk increase in sales. How would you respond to Haslina? A) Haslina is making the mistake of assuming that correlation implies causation. B) I will explain to her that there are some omitted variables that have contributed to an increase in her sales such as changes in income. C) I will explain to her that she is making the error of reverse causality: it is the increase in demand that has enabled her to raise her prices. D) Haslina is right; she has evidence to back her claim. The theory must be erroneous.
The aggregate demand curve will shift rightward when there is:
A. a decrease in government spending. B. a decrease in incomes abroad. C. a tax increase. D. the expectation that future consumer income will rise.
To determine the optimal method of production for a good or service, a perfectly competitive firm needs to know all of the following except
A. the prices charged by its rivals. B. the technologies of production that are available to the firm. C. the prices of inputs. D. the market price of output.
The “isms”