Hot dogs and hot dog buns are complements. An increase in the price of flour used to make hot dogs buns will
a. increase consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs.
b. increase consumer surplus in the market for hot dogs and increase producer surplus in the market for hot dog buns.
c. decrease consumer surplus in the market for hot dog buns and increase producer surplus in the market for hot dogs.
d. decrease consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs.
d
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
If psychological limitations and other complications cause people to be unable to examine and think through every possible choice available to them and rely instead on rules of thumb, then these individuals exhibit
A) unbounded rationality. B) normative thinking. C) bounded rationality. D) positive thinking.
Which of the following is a driving force underlying economic growth?
a. trade restrictions that protect domestic businesses from competition with foreign producers b. regulations that require businesses to obtain permission from the government before starting a new business c. tax increases that expand the revenues of the government d. entrepreneurial discovery and production of improved products
Scarcity refers to the situation in which
A) unlimited wants exceed limited resources. B) unlimited resources exceed limited wants. C) a country's population is larger than its resource base. D) a nation's poverty level increases faster than its population.