Suppose we observe that the demand for eggs increases when people buy more potatoes. We can conclude that eggs and potatoes are
A) inferior goods.
B) normal goods.
C) complements.
D) substitutes.
Answer: C
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Property rights
A) are essentially arbitrary. Therefore, rearranging them will have few effects. B) do not really exist except in a capitalist society. C) are a major part of the "rules of the game", which govern economic activity. D) prevent people from cooperating in the most effective way. E) are different from human rights.
The Federal Reserve:
A. is fairly independent of the rest of government. B. works closely with the Treasury department. C. is easily swayed by political pressure. D. has become an ineffective policy-making body in the last decade.
To the extent that high incomes can be attributed to very high demand for very scarce abilities, the labor supply effects of a substantial increase in the tax rate
a. will be zero as long as the labor supply curve is vertical. b. will be significant because the demand curve is fixed. c. cannot be predicted because the substitution and income effects offset each other. d. will be zero as long as there is no economic rent in the income.
U.S. corporations are not motivated to protect the interests of small shareholders
a. True b. False