Economics is concerned with the trade-offs that emerge because of scarcity. The term "trade-offs" refers to
What will be an ideal response?
the alternatives given up when making choices.
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Refer to Figure 6-8. Identify the two goods which are complements
A) Good X and Good Y B) Good X and Good Z C) Good Y and Good Z D) It is not possible to distinguish any relationship among the goods.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
If a consumer wishes to maximize satisfaction given limited income and MUx/Px< MUy/Py then the consumer should:
A. buy less of both X and Y. B. buy more of X and less of Y. C. buy more of Y and less of X. D. buy more of both X and Y.
If the price of sandals increases by 10 percent and the quantity demanded falls by 20 percent, then the price elasticity of demand in absolute value is
A. 20 percent. B. 2. C. 2 percent. D. .2.