If a decrease in the price of good X causes a decrease in demand for good Y, the two goods are
A. inferior.
B. complements.
C. normal.
D. substitutes.
Answer: D
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Why are isoquants negatively sloped?
A) Along a single isoquant, the firm can substitute the use of one input for another while holding the total level of output constant. B) Due to the effects of diseconomies of scale. C) Because the farther the isoquant is from the origin, the higher the level of output. D) Because price and quantity demanded are inversely related.
Suppose Lisa spends all of her money on books and bagels, and a bagel is an inferior good for her. When the price of coffee increases, the
A) consumption of coffee will fall. B) consumption of coffee will rise. C) consumption of coffee will not change. D) Not enough information.
Suppose that initially there is no public debt. Using the above table, the public debt over this four year period would have
A) increased by $215. B) decreased by $100. C) increased by $1,375. D) decreased by $1,590.
Holding a currency to the gold standard works:
A. to the advantage of borrowers at the expense of savers. B. for no one, and hurts both savers and borrowers from access to money. C. for everyone, benefiting both savers and borrowers. D. to the advantage of savers at the expense of borrowers.