Assume the demand curve for product X shifts to the right. This might be caused by:
A. a decline in income if X is an inferior good.
B. a decline in the price of Z if X and Z are substitute goods.
C. a change in consumer tastes that is unfavorable to X.
D. an increase in the price of Y if X and Y are complementary goods.
Answer: A
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When Toyota introduced the new Prius in the United States, which of the following occurred?
A The hybrid car was not as successful as expected. B The costs of manufacturing were too high and Toyota had to stop production. D All of the above C Toyota confronted the risk of making large investments and the uncertainly over future oil prices.
If the marginal cost curve is below the average variable cost curve, then
A. average variable costs are decreasing. B. average variable costs are increasing. C. marginal cost must be decreasing. D. average variable costs could either be increasing or decreasing.
Answer the following statements true (T) or false (F)
1) When there are unplanned increases in inventories, then actual investment ends up being less than planned investment. 2) If planned investment is larger than saving, then real GDP will increase as the economy adjusts towards equilibrium. 3) In a closed private economy, an unplanned decrease in inventories will cause firms to increase real GDP. 4) If the MPC in the economy is 0.7 and aggregate expenditures fall by $10 billion, then real GDP will fall by $17 billion. 5) If aggregate expenditures rise by $200 billion and real GDP consequently rises by $500 billion, then the MPC in the economy must be 0.4.
When federal government spending amounts to less than tax revenues, the federal government runs a budget deficit
Indicate whether the statement is true or false