Ceteris paribus, if consumer tastes change so that more people are eating broccoli, then what will happen to the market equilibrium for cabbage, a substitute good for broccoli?
A. Price will increase, and quantity will increase.
B. Price will decrease, and quantity will decrease.
C. Price will decrease, and quantity will increase.
D. Price will increase, and quantity will decrease.
Answer: B
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A key assumption of the public choice model is that government policymakers will pursue their own self-interests
Economists assume that consumers and firms pursue their own self-interests when they interact in competitive markets and this interaction results in efficient economic outcomes. Does the pursuit of self-interest by policymakers result in efficient economic outcomes?
Monetarists view government intervention in the economy as
A) necessary to maintain full employment. B) unnecessary and potentially damaging. C) effective because it stimulates capital formation. D) leads to consistently higher employment and output.
Which of the following is true?
What will be an ideal response?
Suppose one observes that when the price of peanut butter increases, the demand for jelly increases. One should conclude that:
A. peanut butter and jelly are substitutes. B. peanut butter and jelly are complements. C. peanut butter and jelly are normal goods. D. peanut butter and jelly are inferior goods.