Assume that a college student purchases only diet soda and potato chips. The substitution effect associated with a decrease in the price of a potato chips will result in
a. an increase in the consumption of diet soda only.
b. a decrease in the consumption of diet soda only.
c. an increase in the consumption of potato chips and a decrease in the consumption of diet soda.
d. a decrease in the consumption of potato chips and an increase in the consumption of diet soda.
C
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Which of the following is true regarding pollution charges?
i. They force a polluter to pay a price for its pollution. ii. They are based on the marginal external cost of pollution. iii. The fee that produces the efficient amount of pollution is easily determined. A) i only B) i and ii C) ii and iii D) i, ii, and iii E) i and iii
To raise economic growth, a tighter fiscal policy should be accompanied by a ________ money supply in order to keep the ________ from falling
A) larger, output ratio B) larger, real interest rate C) smaller, output ratio D) smaller, real interest rate
The hot spot problem is:
a. the U.S. obtains the majority of its oil supplies from politically unfriendly countries. b. some air pollutants such as sulfur dioxide have a greater effect nearby than further away. c. some air pollutants such as carbon dioxide have an equal effect nearby and further away. d. nuclear plants heat up nearby water, causing a decline in the native fish population.
The supply function
A. does not include technology. B. shows the relationship between the quantity supplied of X and variables other than its price. C. recognizes that the quantity of a good produced depends on its price and supply shifters. D. describes how much of good X will be produced at an alternative price of good X, given all the other variables being constant.