Which statement best illustrates complementary goods?
A) The price of tennis rackets declines so your economics instructor decides to take tennis lessons and purchases several cans of new tennis balls.
B) The price of Apple Macintosh computers declines so your economics instructor sells his or her IBM personal computer and buys a Macintosh.
C) After receiving a promotion and a hefty year-end bonus from the college, your economics instructor decides to stop buying denim jeans and switches to clothing befitting his or her loftier position on the faculty.
D) Fearing that the price of pipe tobacco will rise next year, your economics professor goes to his local tobacconist and purchases an ample supply to last for several years.
Ans: A) The price of tennis rackets declines so your economics instructor decides to take tennis lessons and purchases several cans of new tennis balls.
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Investment spending ________
A) is comprised of fixed and inventory investment B) is negatively related to the real interest rate C) is heavily influenced by what Keynes coined as "animal spirits" D) all of the above E) none of the above
A true cost-of-living adjustment in response to a change in prices would compensate consumers so that they would be able to
A) purchase the same bundle they purchased before prices changed. B) achieve the same level of utility they did before prices changed. C) face the same choices they did before prices changed. D) achieve an increase in utility that is equal to the rate of inflation.
Clear-cut mutual interdependence with respect to the price-output policies exists in:
A. pure monopoly. B. oligopoly. C. monopolistic competition. D. pure competition.
An increase in ________ will cause the ________ to fall by a larger percentage if firms aren't holding excess labor.
A. output; inflation rate B. inflation rate; GDP C. output; unemployment rate D. unemployment rate; GDP