An increase in the price of a resource would cause:
a. producers to substitute other inputs for the resource
b. consumers to substitute other products for goods that increase in price as the result of the higher resource price.
c. an increase in the demand for products that use the resource intensely.
d. both (a) and (b) to occur.
d
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In order to societies to reap the gains from trade, it is necessary to
A) define and enforce property rights. B) foster economic growth. C) distribute resources equally. D) achieve productive efficiency.
The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT
A) consumer income. B) the price of the good concerned in the law of demand. C) the prices of substitutes. D) tastes and preferences.
The general rule for allocating a productive resource efficiently across different production activities of the same product, like fishing boats in the text case example, is to choose the allocation for which the
A. marginal product of the resource is the same in every activity. B. total product of the resource is the same in every activity. C. average product is equal to the marginal product in every activity. D. average product of the resource is the same in every activity.
A commercial bank's reserves are:
A. liabilities to both the commercial bank and the Federal Reserve Bank holding them. B. liabilities to the commercial bank and assets to the Federal Reserve Bank holding them. C. assets to both the commercial bank and the Federal Reserve Bank holding them. D. assets to the commercial bank and liabilities to the Federal Reserve Bank holding them.