Pepsi and pizza are normal goods. When the price of pizza rises, the substitution effect causes Pepsi to be relatively
a. more expensive, so the consumer buys more Pepsi.
b. more expensive, so the consumer buys less Pepsi.
c. less expensive, so the consumer buys more Pepsi.
d. less expensive, so the consumer buys less Pepsi.
c
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If you knew that an investment was going to pay you $46,370 in 5 years, and you knew that the annual interest rate over that time would be 3 percent, you could calculate the present value to be:
A. $39,999. B. $37,000. C. $41,998. D. $41,600.
The marginal cost curve: a. is a vertical line
b. generally rises at first and then declines as output expands. c. generally falls at first and then rises as output expands. d. intersects the average variable cost curve from below at its maximum point.
Which of the following is a way to compute GDP?
a. add up the wages paid to all workers b. add up the quantities of all final goods and services c. add up the market values of all final goods and services d. add up the difference between the market values of all final goods and services and then subtract the costs of producing those goods and services
In the short run with predetermined prices, when output is less than planned aggregate expenditure, firms will:
A. decrease planned aggregate expenditure. B. increase planned aggregate expenditure. C. increase production. D. reduce production.