If mortgages and houses are complements in consumption and interest rates decrease, we would expect to see
a. An increase in demand for houses
b. An decrease in demand for houses
c. An increase in the quantity of houses demanded
d. An decrease in the quantity of houses demanded
a
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? According to Figure 5-13, if the price of good X falls, the optimal combination will move
A. from U1to a point on a higher indifference curve, such as U3. B. from U2to a point on a higher indifference curve, such as U3. C. from U1to a point on a higher indifference curve, such as U3. D. from U2to a point on a higher indifference curve, such as U1.
One way to avoid the free rider problem is
A) through mandates. B) for the government to provide the good or service. C) to use social pressure. D) All of the above.
Suppose that a labor union negotiates an increase in wages of 4 percent for the coming year because annual inflation for the past five years has been 4 percent. The expectations formed by the union are:
a. pessimistic expectations. b. deductive expectations. c. rational expectations. d. adaptive expectations. e. optimistic expectations.
Comparing how many dollars it takes to attend college each year to annual earnings on a job represents the use of money as a:
a. medium of exchange. b. store of value. c. store of coincidence. d. unit of account.