What must be true in terms of the income effect, the substitution effect, and the type of good for the good's demand curve to be upward sloping?
What will be an ideal response?
The income effect would have to be larger than the substitution effect, and the good would have to be an inferior good.
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The decision by the federal government to prohibit cigarette companies from advertising on television actually caused the companies' profits to increase, an outcome that is consistent with the prediction of the prisoner's dilemma game
Indicate whether the statement is true or false
Firms tend to raise the price of their goods after acquiring a firm that sells a substitute because
a. They lose market power b. There is an increase in the overall demand for their products c. The bundle has a more elastic demand than individual goods d. The bundle has a more inelastic demand than individual goods
The law of supply states that, holding other factors constant, as price increases
a. Quantity supplied increases b. Quantity supplied decreases c. Quantity demanded increases d. Quantity demanded decreases
To an economist, the word 'marginal' means:
A) total. B) average. C) next or additional. D) sunk. E) none of these choices.