Assume that soda and bottled water are substitutes. Given a downward sloping demand curve for bottled water, an increase in the price of bottled water will cause
A. a leftward shift of the demand curve for bottled water.
B. a decrease in the demand for soda.
C. a leftward shift in the demand for soda.
D. an increase in the demand for soda .
Answer: D
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In the income-expenditure model, equilibrium output is the level of output at which the 45-degree line intersects the planned expenditures line. Explain why this output level is an equilibrium level
Illustrate your answer with a diagram of the income-expenditure model.
If property rights are not enforced in a country,
A) entrepreneurs are unlikely to risk their own funds investing in such an economy. B) that country's growth rate will not be affected. C) the market system will still work smoothly. D) that country will grow more rapidly because of the reduction of law suits.
The mobility of _____ means that in the _____ it can be used for consumption, thus the burden of most corporate income taxes will be borne by the customers of a firm
a. labor; long run b. labor; short run c. capital; long run d. capital; short run
Suppose a monopolist's demand curve is P = 60 - Q, and its cost function is C = 10Q + 50 so its marginal cost is 10. If a governmental agency wished to set the price that maximized social welfare, that price would be
A) $10.00. B) $11.02. C) $14.57. D) $35.00.