An increase in the price of oil causes
a. a decrease in the demand for substitute goods.
b. an increase in the price of substitute goods.
c. an increase in the demand for complementary goods.
d. an increase in the price of complementary goods.
b. an increase in the price of substitute goods.
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A special license is required to operate a taxi in many cities. The number of licenses is restricted. More drivers want licenses than are issued. This describes a non-perfectly competitive market because
A) taxi services are very different. B) firms cannot freely enter and exit the market. C) transaction costs are high. D) the government generates revenue from the licenses.
If the net public debt expanded last year, then which of the following most likely occurred during the year?
A) The government's budget was balanced.
B) The government's tax collections exceeded its spending.
C) The government experienced a budget surplus.
D) The government experienced a budget deficit.
When a competitive market achieves allocative efficiency, it is implied that
A. the quantity demanded is lower than the quantity supplied. B. the marginal benefit of having the product is greater than the marginal cost. C. the combined consumer and producer surplus is maximized. D. the buyers are getting the maximum consumer surplus from the product.
What is the distinction between private cost and social cost?
What will be an ideal response?