When a good becomes more expensive, it yields less satisfaction per dollar, so consumers buy less of it and more of other goods. This is called the _____ effect
a. substitution
b. income
c. replacement
d. augmentation
e. disbursement
a
You might also like to view...
According to this Application, after the government deceased cigarette taxes in several Canadian provinces in 1994, the decrease in the price of cigarettes in these provinces
A) increased the smoking rate by roughly 17 percent B) more than doubled the smoking rate. C) created no noticeable change in the smoking rate. D) was accompanied by a slight decrease in the rate of smoking.
Beginning in 1971, the Nixon administration enacted a series of price controls in hopes of reducing inflation. The first of these, known as Phase I,
a. consisted of a price freeze. b. imposed a ceiling price on meat, but left other prices unregulated. c. froze wages, but left other prices unregulated. d. applied only to oil prices.
Which of the following factors will reduce considerably the ability of a union to raise the wages of its workers?
a. an elastic demand for the goods produced by union labor b. a five-year apprenticeship before one can qualify for jobs held by union members c. high tariffs on goods produced by the union labor d. favoritism in the allocation of government contracts to firms that employ union labor
Market power is the ability of a firm to
A. Act as a price taker. B. Advertise. C. Increase the number of substitute goods. D. Control the price and quantity supplied.