Which of the following most clearly illustrates the concept of "derived demand"?
a. An increase in the price of steak causes the demand for poultry to increase
b. An increase in the demand for new houses leads to an increase in the demand for construction workers.
c. An increase in consumer income leads to an increase in the demand for services provided by the government.
d. An increase in the demand for new cars causes the demand for used automobiles to rise.
b
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Exhibit 36-1 Bond FaceValueof Bond Price ofthe Bond Annual CouponPayment A $1,000 $850 $25 B $1,000 $950 $41 C $1,000 $1,100 $52 D $1,000 $1,100 $32 E $1,000 $1,000 $50 Refer to Exhibit 36-1. The yield on bond E is approximately
A. 37.5 percent. B. 0.38 percent. C. 0.45 percent. D. 5.0 percent.
The average total cost curve of a firm is U shaped but the average variable cost is not.
Answer the following statement true (T) or false (F)
A firm in a perfectly competitive industry
A. is unaffected by the entrance of new firms into the industry, since entering firms affect only the prices they themselves receive. B. always produces more output in the long run than in the short run. C. may choose a different output in the long run than in the short run. D. earns economic profit in the long run but not in the short run.
Each of the following are characteristics of a typical indifference curve map except
a. moving northeast to a new indifference curve will increase utility. b. points on the same indifference curve yield equal utility. c. the axes represent levels of utility for each of the goods. d. indifference curves cannot cross.