Which of the following causes a decrease in demand for a normal good?
A) increase in price of a substitute
B) increase in price of a complement
C) increase in price
D) increase in income
B
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When the supply (curve) of a product increases,
A) suppliers change their plans. B) demanders change their plans. C) the price changes. D) all of the above occur. E) none of the above occur.
On the Fed's balance sheet, assets include
A) reserves of depository institutions and mortgage-backed securities. B) U.S. government securities and mortgage-backed securities. C) currency and reserves of depository institutions. D) currency and mortgage-backed securities.
Which of the following statements concerning economic models is FALSE?
A) Economic models must provide usable predictions. B) Economic models are based on data alone and no assumptions. C) Economic models are tested empirically. D) Economic models relate to how people behave.
Explain intuitively why the market for a nonexcludable good fails to provide an efficient quantity.
What will be an ideal response?