Pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?
A) The demand for pizzas decreases and the demand for tacos increases.
B) The demand for both goods decreases.
C) The quantity of tacos demanded increases and the quantity of pizza demanded decreases.
D) The quantity of pizza demanded decreases and the demand for tacos increases.
E) The demand for each decreases because both are normal goods.
D
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Let C = 800 + 0.6y and I = 100. Assume no government or foreign sectors. If investment decreases by 40, then the value of the multiplier is
A) -2.5. B) -1.67. C) 1.67. D) 2.5.
Suppose ordinarily half your class would get an A and half would get a B, with A students having a 25% chance of getting an A and B students having a 25% of getting an A. It costs $100 to persuade the instructor to raise a B grade to an A. A student is willing to pay $40 to insure she will get her usual grade and $70 to insure she will get a higher grade than usual. a. If all students buy insurance that guarantees them an A, what is the zero profit price for an insurance company that offers A insurance. b. Will grade insurance be sold in equilibrium? c. Who would buy insurance and at what price if the insurance companies could tell what type of student each student is? d. Is either the result in (b) or (c) efficient?
What will be an ideal response?
The impact of monetary policy on the exchange rate is emphasized by
A) supply-side economists. B) Monetarists. C) Keynesians. D) rational expectations theorists.
The EEC is a group of
a. South American countries b. Eastern European countries c. Asian countries d. Middle Eastern countries e. Western European countries