Which of the following statements is correct?
A. An increase in the price of C will decrease the demand for complementary product D.
B. A decrease in income will decrease the demand for an inferior good.
C. An increase in income will reduce the demand for a normal good.
D. A decline in the price of X will increase the demand for substitute product Y.
Answer: A
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Which of the following is likely to be present in a perfectly competitive market?
a. patents b. government licenses c. nonprice competition such as advertising d. high capital costs e. firms producing identical products
If consumption expenditures increased by $150 million, while GDP remained the same, which of the following could have occurred, all else equal?
a. Exports increased by $150 million b. Imports decreased by $150 million c. Net exports increased by $150 million d. Net exports decreased by $150 million e. Private investment increased by $150 million
Which of the following would lead to an increase in the demand for British pounds?
a. A declining interest in British goods b. A decrease in the U.S. interest rate relative to the British interest rate c. Expectations that the exchange rate will fall d. A decrease of the U.S. price level relative to the British price level e. A decrease in the exchange rate.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The best point for society would be
A. either Point B or Point C, as the total amount being produced at either of these points is approximately the same. B. at any of the labeled points, as all of the points represent an efficient allocation of resources. C. Point C, as at this point there are approximately equal amounts of LCD and OLED televisions being produced. D. indeterminate from this information, as we don't have any information about the society's desires.