Suppose that as the price of apples rises, people switch from eating apples to eating oranges. This is known as:
A. the normal effect of a price change.
B. a decrease in the demand for apples.
C. the substitution effect of a price change.
D. the income effect of a price change.
Answer: C
You might also like to view...
Recycling efforts such as those exemplified by BMW's Design for Disassembly (DFD) program
a. permanently diminish the flow of residuals back to nature b. are not represented in the materials balance model c. represent short-term conversion of residuals into recycled materials or goods d. reduce the amount of wastes returned to nature in the long-run
In a bakery for a given amount of croissant production, an additional pastry worker produces 100 additional croissants, and one extra mixing machine produces 50 extra croissants. Each pastry worker costs $30 to hire, and a mixing machine costs $10 per unit. The bakery owner should
A. produce fewer croissants. B. hire an additional pastry worker. C. purchase an additional mixing machine and use one less pastry worker. D. hire an additional pastry worker and sell a mixing machine.
It can be said that ____ laid the foundation for the Industrial Revolution
a. the discovery of the Americas b. private property rights c. the invention of the cotton gin d. the discovery of gold e. the development of a strong judicial system
The reason why firms in perfect competition do not advertise is because
a. their demand curves are all downward sloping and if they sell more it would have to be at a lower price b. they differentiate themselves, as with milk c. they are typically small in size and cannot produce for a wider market d. there is no entry into the industry e. there is no product differentiation among the goods produced