When the price of a normal good decreases, people buy ________ of the good due to ________
A) more; the substitution effect only
B) more; the substitution and income effects
C) less; the substitution effect only
D) less; the income effect only
B
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It does not make economic sense to maximize short run performance over long run performance
Indicate whether the statement is true or false
When L.L. Bean decides to increase its prices due to general inflation, they must reprint the millions of catalogs they produce and distribute. The costs associated with doing so in response to inflation are called:
A. shoe-leather costs. B. menu costs. C. printing costs. D. tax distortions.
From the perspective of the United States, a reduction in the nominal exchange rate will cause which of the following?
A) The dollar becomes more expensive to foreigners. B) Foreign goods are less expensive to Americans. C) Foreign currency is less expensive to Americans. D) American goods are less expensive to foreigners. E) none of the above
Since 1950, the balance of trade for United States has
A. gone from a small deficit to a larger deficit. B. remained constant. C. gone from a deficit to a surplus. D. gone from a surplus to a deficit.