Refer to Figure 8.2. Holding other variables constant, an increase in income taxes will result in a
A) movement from point A to point B.
B) movement from point B to point A.
C) shift from curve S1 to curve S2.
D) shift from curve S2 to curve S1.
D
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Suppose that when the price of ice cream increases, Liza decreases her purchase of hot fudge. To Liza
A) ice cream is a normal good and hot fudge is an inferior good. B) ice cream and hot fudge and substitutes. C) ice cream and hot fudge are normal goods. D) ice cream and hot fudge are complements.
What type of relationship does the real interest rate have with respect to Investment spending?
A. No relationship B. constant relationship C. positive relationship D. negative relationship
A tariff is a tax imposed on ________ good.
A. a luxury B. a domestic C. an illegal D. an imported
The profit maximizing behavior of a monopoly is different from that of a perfectly competitive firm in that a monopoly can
A) only choose the desired output, while a competitive firm can control only price. B) only choose the desired price, while a competitive firm can control only output. C) control the position of its demand schedule, but a competitive firm cannot. D) control the desired price and output to maximize profits, but a perfectly competitive firm can only choose the desired output.