Two goods are considered substitutes only if a(n)
a. decrease in the demand for one leads to a decrease in the supply of the other
b. increase in the demand for one leads to a decrease in the supply of the other
c. increase in the price of one leads to an increase in the demand for the other
d. decrease in the price of one leads to an increase in the demand for the other
e. decrease in the supply of one leads producers to switch to production of the other
C
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Price elasticity of demand is a measure of the change in quantity demanded that results from a change in price
a. True b. False Indicate whether the statement is true or false
The velocity of money is
A) independent of M, P, and Y. B) independent of M and Y. C) calculated from M, P, and Y. D) calculated from M and Y.
If taxable income is rising and if the marginal tax rate is greater than the average tax rate, then
A. the average tax rate must be rising. B. the average tax rate must be falling. C. the average tax rate may be either rising or falling. D. the tax is regressive.
Which of the following is not characteristic of the demand for a commodity that is elastic?
A. The relative change in quantity demanded is greater than the relative change in price. B. Buyers are relatively sensitive to price changes. C. Total revenue declines if price is increased. D. The elasticity coefficient is less than one.