A decrease in input costs in the production of LCD televisions caused the price of LCD televisions to decrease. Holding everything else constant, how would this affect the market for video game consoles (a complement to LCD televisions)?
A) The demand for video game consoles would decrease and the equilibrium price of video game consoles would decrease.
B) The demand for video game consoles would decrease because consumers could afford to buy fewer LCD televisions and video game consoles.
C) The supply of video game consoles would increase and the equilibrium price of video game consoles would decrease.
D) The demand for video game consoles would increase and the equilibrium price of video game consoles would increase.
D
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If India decides to enact environmental laws to reduce air pollution, what would be the effect on GDP?
A) GDP would decrease if the pollution controls reduce productivity by more than the cost of the controls. B) GDP would increase as the environmental costs of pollution were not included in the calculation of GDP. C) GDP would increase as the citizens of India were made happier as the air pollution was reduced. D) GDP would increase reflecting the fact that the air would be cleaner.
Under a laissez-faire system,
A. government organizes production and distribution of goods. B. a small bureaucracy of central planners tells firms what to produce and how to produce it. C. costs of production and consumers’ demands determine the output mix. D. firms try to produce the goods that they think are good for consumers.
Suppose that the basket of goods purchased by the typical consumer costs $188.80 this year and it cost $160 in the base year. The CPI in the base year would be
A) 85.11. B) 100.0. C) 118.0. D) 348.8.
In 18th century Europe, governments gave guilds legal authority to limit production of goods
This authority obstructed the market mechanism because the guild's actions prevented the forces of ________ from coordinating the self-interested decisions of producers and consumers. A) demand and supply B) nature C) opportunity cost D) absolute advantage