The price of a tomato increases and people buy more lettuce. You infer that lettuce and tomatoes are ________
A) complements
B) normal goods
C) substitutes
D) inferior goods
C
You might also like to view...
If the marginal product of labor is equal to 5 and the marginal product of capital is 2, what is the marginal technical rate of substitution?
What will be an ideal response?
Adam Smith believed that people's pursuit of their own self-interests
a. tended to promote the general welfare b. required the government's "invisible hand" to keep the economy running smoothly c. might cause aggregate demand to be greater than aggregate supply d. would increase the wealth of a nation, which was the quantity of gold and silver it owned e. would decrease the wealth of a nation, which was its ability to produce goods and services
If the Fed wants to lower the interest rate, it will
a. buy bonds and decrease the money supply. b. buy bonds and increase the money supply. c. sell bonds and decrease the money supply. d. sell bonds and increase the money supply. e. sell bonds and decrease money demand.
If prices rise, then persons living on fixed incomes will
a. see their real incomes falling. b. see the purchasing power of their savings fall. c. need to spend more to maintain their standard of living. d. All of the above are true.