An application of the substitute principle would be if the price of Pepsi decreases, then the demand for Coke would____________
a. increase (shift to the left)
b. increase (shift to the right)
c. decrease (shift to the left)
d. decrease (shift to the right)
Ans: c. decrease (shift to the left)
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
At the point where marginal cost equals average variable cost,
a. b and c. b. marginal cost is rising. c. average total cost is at its minimum. d. average variable cost is falling. e. there is no total cost.
Assuming food and beverages make up about 15 percent of total expenditures and food and beverage prices rise by 10 percent while the other components of the price index remain constant, approximately by how much will the price index rise?
A. 25 percent B. 15 percent C. 1.5 percent D. 1 percent
Total utility refers to the:
A. total satisfaction one gets from the consumption of a product. B. satisfaction one gets from the consumption of an additional unit of a product. C. satisfaction one gets from the consumption of an additional unit of a product times its price. D. maximum satisfaction one can get from the consumption of a good.