Suppose you are the manager of Sweet Aroma, a firm that specializes in air freshener. To make your air freshener, you purchase apple skins from apple juice manufacturers. If the demand for apple juice decreases, this will cause the production of apple skins to ________ and the price of apple skins to ________.
A) decrease; rise
B) increase; rise
C) decrease; fall
D) increase; fall
A) decrease; rise
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A system of property rights
A) encourages economic growth by creating incentives to invest in capital and to be innovative. B) discourages economic growth by discouraging the development of new ideas and ways of doing things. C) reduces the efficiency of government, which reduces the growth rate of the economy over time. D) encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.
Monetary policy has a ________ effect on aggregate demand in a(n) ________ economy, and fiscal policy has a ________ effect on aggregate demand in a(n) ________ economy
A) stronger; closed; weaker; open B) stronger; open; weaker; open C) weaker; open; weaker; open D) weaker; closed; weaker; closed
When demand falls and supply stays the same,
A. equilibrium quantity rises. B. equilibrium quantity falls. C. equilibrium quantity stays the same.
Each person is better off with a bigger tax return than with a small tax return. That means that everyone would be better off if all taxes were zero. A person saying that is
A. wrong because firms operate on jealousy. B. wrong because causation and correlation are not the same. C. wrong and have fallen victim to the fallacy of composition. D. right.