Assume two goods are substitutes. Ceteris paribus, a decrease in the price of one good will cause the equilibrium price of the other good to
A. Decrease and the equilibrium quantity of the other good to decrease.
B. Decrease and the equilibrium quantity of the other good to increase.
C. Increase and the equilibrium quantity of the other good to decrease.
D. Increase and the equilibrium quantity of the other good to increase.
Answer: A
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Those who favor smaller government tend to do what in order to make it more difficult for politicians to increase government spending? List at least two methods
What will be an ideal response?
An increase in the price of bread produced domestically will be reflected in
a. both the GDP deflator and the consumer price index. b. neither the GDP deflator nor the consumer price index. c. the GDP deflator but not in the consumer price index. d. the consumer price index but not in the GDP deflator.
Because unregulated natural monopolies earn economic profits greater than zero in the long run, but cannot attract new entrants into the industry:
A. government agencies often regulate the number of firms that compete against natural monopolies. B. government agencies often regulate the price natural monopolies can charge. C. natural monopolies often go out of business. D. natural monopolies are outlawed.
A government-inhibited good is a good which
A. can be consumed by one individual without affecting the consumption of another individual. B. the political process has deemed socially undesirable. C. is not subject to the principle of mutual exclusivity. D. the political process has deemed socially desirable.