If the price of one good increases, and as a result the demand for another related good falls, the goods are
A. complements.
B. normal goods.
C. substitutes.
D. inferior goods.
Answer: A
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In July, market analysts predict that the price of gold will rise in August. What happens in the gold market in July, holding everything else constant?
A) The supply curve shifts to the right. B) The demand curve shifts to the left. C) The quantity demanded and the quantity supplied increase. D) The supply curve shifts to the left.
The median voter theorem states that the outcome of a majority vote
A) tends to favor the preferences of high-income individuals and ignore the median voter. B) is determined by the average consumer and producer in an economy. C) is likely to represent the preferences of the voter who is in the political middle. D) is likely to represent the preferences of society's middle-income voter.
Refer to Figure 8.1. Which graph best represents a variable cost function?
A. A
B. B
C. C
D. D
If there were a favorable supply shock and the central bank wanted to offset the change in the unemployment rate, what would it do?