When the price of a good falls, consumers may increase the quantity consumed because they have greater total purchasing power. This statement describes the:
A. substitution effect.
B. income effect.
C. consumer equilibrium effect.
D. price effect.
Answer: B
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Explain what would happen to the equilibrium price and quantity of oranges if the supply of oranges increased while the demand for oranges decreased
What will be an ideal response?
The Prisoner's Dilemma involves two spies who are held in separate soundproof rooms. But even if the two spies could communicate, what makes it difficult for them to achieve the cooperative solution (both not confessing)?
a. The problem is their lack of information. b. The problem is that it is a nonzero sum game. c. The problem is that both spies have incentives to double cross each other. d. The problem is that all the outcomes are not particularly good for either player.
Answer the following statements true (T) or false (F)
1. The CPI measures price changes for only about two-thirds of all spending. 2. The GDP Implicit Price Defoliator is the broadest index of price changes. 3. The PPI is an index of the price level of aggregate output. 4. Check able deposits are counted as part of the U.S. money supply. 5. Savings deposits are not counted as part of the M1 measure of the U.S. money supply.
The federal government's revenue has declined steadily relative to GDP since 1960
a. True b. False