Americans love to eat peanut butter & jelly sandwiches. If the price of jelly increases (while other things remain constant), what effect will this have on the market for peanut butter?
a. price rises, quantity falls
b. price falls, quantity rises
c. both price and quantity fall
d. both price and quantity rise
e. price rises and quantity remains the same
a. price rises, quantity falls
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Two goods are substitutes if a decrease in the price of one raises the quantity demanded of the other.
Answer the following statement true (T) or false (F)
A decrease in the demand for American-made goods will
A) increase the supply of dollars in the foreign exchange market. B) decrease the supply of dollars in the foreign exchange market. C) decrease the demand for dollars in the foreign exchange market. D) increase the demand for dollars in the foreign exchange market.
If an increase in the price of Product X causes an increase in the demand for Product Y, we can conclude that: a. Products X and Y are complements. b. Products X and Y are substitutes
c. Products X and Y are normal goods. d. The price of Product Y will decrease.
All of the following are sources of increasing returns and economies of scale except:
A. coordination problems in large organizations. B. network effects. C. more specialized inputs. D. spreading of development costs.