If the price of movies on DVD rises while the price of movies purchased on demand through the Internet remains the same, the law of demand predicts that consumers will:
A. substitute movies on the Internet for movies on DVD.
B. buy only movies on the Internet.
C. buy only movies on DVD.
D. substitute movies on DVD for movies on the Internet.
Answer: A
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If a consumer is purchasing a good and her net marginal utility is positive,
A. she should continue to consume at this level. B. she should purchase more units, so long as the net marginal utility is greater than zero. C. she should check to see what the price is. D. she should buy more units until her net marginal utility turns negative.
The ratio of the increase in equilibrium real GDP to the increase in autonomous expenditure is called the
A) MPC. B) consumption function. C) MPS. D) multiplier.
If the price of chocolate increases by 15 percent and the quantity demanded of chocolate declines by 5 percent, the price elasticity of demand ( ) is -3
a. True b. False Indicate whether the statement is true or false
Suppose that a state installs a toll booth on a highway and requires drivers to pay $1.00 before entering the highway. Installation of the toll booth changes:
A. a nonexcludable good into an excludable good. B. a nonrival good into a rival good. C. a public good into a private good. D. a nonrival good into a nonexcludable good.