When the increase in the price of one good causes the demand for another good to decrease, the goods are
A. normal.
B. complements.
C. substitutes.
D. inferior.
Answer: B
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In the long-run equilibrium for a monopolistically competitive firm, price:
A. exceeds marginal cost. B. is equal to marginal revenue. C. is equal to marginal cost. D. exceeds average total cost.
Other things equal, an increase in input prices will:
A. reduce aggregate supply and reduce real output. B. increase the interest rate and lower the international value of the dollar. C. increase aggregate supply and increase the price level. D. increase net exports, increase investment, and reduce aggregate demand.
Traditionally, the Federal Reserve can give emergency loans only to:
A. Securities firms B. Commercial banks C. Investment banks D. Manufacturing firms
Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. If the price of caviar falls from $45 to $35, the market quantity demanded would
A) increase by 50 oz. B) decrease by 50 oz. C) decrease by 70 oz. D) increase by 70 oz.