Suppose a 10% increase in the price of steak reduces the consumption of steak by 30%. Such a price rise will induce households to spend
A. the same amount on steak as before.
B. more on products that are complementary with steak.
C. less of their income on steak.
D. more of their income on steak.
Answer: C
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Compare and contrast the Bertrand and Cournot models of oligopoly. Your discussion should include assumptions made, goals of the firms and the resulting outcomes.
What will be an ideal response?
As the service sector in the U.S. economy grows, traditional productivity measures will become:
a. biased downward, because the qualitative aspects of a service tend to be understated. b. biased upward, because quantitative improvements in the service sector tend to be overstated. c. biased upward, because prices in the service sector always rise faster than prices in manufacturing. d. biased downward, because service output leads to a long-run decline in the inflation rate. e. completely inappropriate for measuring even manufacturing output.
A movement downward and to the left along a supply curve is called a(n)
a. increase in supply. b. decrease in supply. c. decrease in quantity supplied. d. increase in quantity supplied.
The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.
Point Y is ________, and point V is ________.
A. inefficient; efficient B. efficient; efficient C. inefficient; inefficient D. efficient; inefficient