William likes Dr. Pepper and pork sandwiches. When the price of pork sandwiches rises, the substitution effect causes Dr. Pepper to be relatively
a. more expensive, so William buys more Dr. Pepper.
b. more expensive, so William buys less Dr. Pepper.
c. less expensive, so William buys more Dr. Pepper.
d. less expensive, so William buys less Dr. Pepper.
C
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To have an effect on the market, a price floor should be set at a price
A. above the equilibrium price. B. equal to the equilibrium price. C. below the equilibrium price. D. at any price on the supply curve.
The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was
A) the high levels of unemployment that occurred during the Great Depression. B) the presence of both high unemployment and high inflation during the 1970s. C) the theoretical proof that classical ideas were invalid. D) the evidence that classical ideas were useful during economic booms, but not during economic recessions.
A dominant strategy is one that
A) yields a position of the winner so long as the other participants act as planned. B) every participant in the game will follow. C) turns a negative-sum game into a positive-sum game. D) always yields the highest benefit regardless of what the other players do.
The market for toothpaste is a good example of perfect competition
a. True b. False Indicate whether the statement is true or false