Suppose you drink more tea because the price of coffee has increased. Which of the following best explains your action?
a. the law of supply
b. tea and coffee are complements
c. the substitution effect
d. the income effect
e. your nominal income has increased
C
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When will the scale effect of a wage increase cause a fall in the amount of labor employed?
a. Always. b. When labor is not a regressive factor. c. When labor and capital are substitutes in production. d. When labor and capital are complements in production.
If the price of prime rib falls, the income effect due to the price change will cause
A) an increase in the quantity of prime rib supplied. B) an increase in the demand for prime rib. C) an increase in the demand for flank steak, a substitute for prime rib. D) an increase in the quantity of prime rib demanded.
Fracking involves:
A) extracting certain forms of energy from shale rock formations B) deep water drilling for energy with minimal externalities C) the reduction of menu costs thus allowing prices to adjust more freely D) breaking down the production of goods resulting in more competitive markets
Economic analysis requires us to combine:
A. unlimited resources with limited wants. B. theory with observations. C. developed and developing nations. D. republicans and democrats.