If two goods are substitutes, then a(n)
a. increase in the demand for one of them will cause its price to fall
b. increase the supply of one of them will cause its price to rise
c. increase in the price of one of them will cause the demand for the other to increase
d. increase in the price of one of them will cause the supply of the other to increase
e. decrease in the price of one of them will cause the demand for the other to increase
C
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A monopolistically competitive firm is producing an output level at which marginal revenue is greater than marginal cost. This firm should __________ quantity and __________ price to increase profit or reduce losses
a. increase, increase b. increase; decrease c. decrease; increase d. decrease; decrease e. increase; not change
Rent controls create distortions in the housing market by:
a. increasing rents received by landlords b. raising property values. c. encouraging landlords to overspend for maintenance. d. discouraging new housing construction. e. increasing the supply of housing in the long run.
Some goods can be classified as either public goods or private goods depending on the circumstances
a. True b. False Indicate whether the statement is true or false
Which of the following are examples of situations in which the standard model of the consumer may not be realistic?
A) Impulse purchases B) Following fads and fashions instead of one's own preferences C) Addictions or other strong habits in consumption D) all of the above