Which of the following causes a decrease in demand for a normal good?
A) increase in price of a substitute
B) increase in price of a complement
C) increase in price
D) increase in income
Answer: B
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With an increase in income, we can predict that a consumer will choose a new market basket
a. on a lower indifference curve. b. on the same indifference curve but the new budget line. c. on a higher indifference curve that passes through the new budget line. d. on a higher indifference curve that is tangent to the new budget line
Which of the following institutions is not eligible to borrow from the Federal Reserve at the discount rate?
A) Federal government B) Commercial banks C) Credit unions D) Mutual savings banks
When the price of yen in terms of dollars increases, Honda automobiles from Japan become cheaper to U.S. residents.
Answer the following statement true (T) or false (F)
Collectives in the Soviet Union were inefficient producers of agricultural products. Why?
(A) The farms were too small to produce substantial crops. (B) Most farmers were poor and ad to pay for their own equipment, seeds, and fertilizer out of their own pockets. (C) Soviet central planners ignored the farms in favor of factories producing consumer goods. (D) Farm workers had guaranteed incomes, so they had few incentives to produce more or better crops.