"Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease
This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right." Which of the following correctly comments on this statement?
A) The statement is false because one cannot assume that chips and salsa are complements for all consumers.
B) The statement is false because a change in the price of chips would not change the demand for chips.
C) The statement will be true if consumer tastes for chips and salsa do not change.
D) The statement is false because salsa is an inferior good; chips are normal goods.
B
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The Jeans Store sells 7 pairs of jeans per day when it charges $100 per pair. It sells 8 pairs of jeans per day at a price of $90 per pair. The marginal revenue of the eighth pair of jeans is
A) $20. B) $90. C) $100. D) $700.
Demand-pull inflation is typically caused by rapidly rising costs of production
a. True b. False Indicate whether the statement is true or false
Which of the following would lead to a rightward movement along the aggregate expenditure line rather than a shift of the line itself?
a. A reduction of the marginal propensity to consume b. A decrease in income of $100 billion c. An increase in income of $50 billion d. An increase in the interest rate e. A $50 billion decrease in autonomous consumption spending
Refer to the following graph.
Which price will create the greatest shortage?
A. P0 B. P1 C. P2 D. P3