When the price of summer tank tops falls and you buy more of them because they are relatively less expensive, this is called
A) the income effect. B) the deadweight loss effect.
C) the elasticity effect. D) the substitution effect.
D
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Which of the following situations leads to an unplanned increase in inventories of $2.0 trillion?
A) real GDP = $5.0 trillion and aggregate planned expenditures = $5.0 trillion B) real GDP = $6.0 trillion and aggregate planned expenditures = $4.0 trillion C) real GDP = $8.0 trillion and aggregate planned expenditures = $5.0 trillion D) real GDP = $5.0 trillion and aggregate planned expenditures = $7.0 trillion E) More information is needed about planned investment and actual investment.
"Automatic stabilizers" played a part in reducing the length and severity of the recession of 1953-54 . Which of the following is an example of an "automatic stabilizer"?
a. Deficit spending by the federal government b. Spending on education by local and state governments c. Programs like unemployment insurance and Social Security d. Actions by the Federal Reserve aimed at reducing interest rates
Which of the following statements would come from someone classified as unemployed?
a. I'm not working because I'm going to Jamaica with my buddy. b. I haven't had a job in a year, and I stopped looking for a job nine months ago. c. I'm a full-time student at the University of Illinois who doesn't have time to work. d. I can't stand my current job as a telemarketer. I used to be a nuclear engineer. e. I'm not working. I had three interviews this week, and I'm trying to find a job.
Suppose antitheft auto alarms are produced in a price-taker market that is initially in long-run equilibrium. It is estimated that only 23 percent of all autos have alarms. Due to rising auto theft, Congress mandates alarms in every vehicle. Assume complete compliance. If the industry is an increasing cost industry, price will
a. increase in both the short run and long run. b. decrease in both the short run and long run. c. increase in the short run but not in the long run. d. decrease in the short run but not in the long run.