If the demand for coffee decreases as income decreases, coffee is a(n)
A. complementary good.
B. normal good.
C. substitute good.
D. inferior good.
Answer: B
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We observe the duration of unemployment falling and wage rates rising. It is likely that
A) the government has initiated expansionary fiscal policy but the policies haven't taken effect yet. B) summer has arrived. C) aggregate supply has increased. D) aggregate demand has increased.
The total cost of production is measured by the sum of fixed and variable costs
Indicate whether the statement is true or false
If the CPI was 125 this year and 120 last year, then
a. the cost of the CPI basket of goods and services increased by 4.2 percent this year. b. the price level increased by 4.2 percent this year. c. the inflation rate for this year was 4.2 percent. d. All of the above are correct.
The effect of higher prices from the domestic sugar beet program in the United States is:
A. Economically efficient because it maintains the income of sugar beet farmers and reduces potential unemployment costs B. That it discourages the production of sugar beets in the United States because businesses cannot afford to use sugar beets in production C. That it increases exports of sugar beets from the United States to other nations D. "Regressive" because low-income households spend a larger percentage of their income on food than do high-income households