The price of peanut butter rises due to a blight on the peanut crop; peanut butter and jelly are complements. What happens to the equilibrium quantity and price of jelly?
A. Equilibrium price rises, equilibrium quantity falls.
B. Equilibrium price rises, equilibrium quantity rises.
C. Equilibrium price falls, equilibrium quantity increases.
D. Equilibrium price falls, equilibrium quantity falls.
Answer: D
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A decline in the price of a bond causes the yield of the bond to
A) rise. B) fall. C) remain unchanged. D) rise if it's a short-term bond, fall if it's a long-term bond.
Which of the following is not a characteristic of the Earned Income Tax Credit (EITC)?
a. It does not discourage recipients from working. b. It is less distortionary than other anti-poverty programs. c. It helps the disabled who cannot work. d. It applies only to the working poor.
The textbook finds the growth record of Latin American countries after World War II "mixed" but suggests as the "safest generalization" that
What will be an ideal response?
The argument that demand for apartments is inelastic in the short run is based on the idea that
A. it is costly to move to a different location. B. it takes time to build new apartments. C. landlords will fix up many new apartments when there are small changes in rent. D. people will change apartments quickly when there are small changes in rent.