After the price of smartphone apps falls, Justin buys fewer flash drives but he buys a new smartphone. For Justin
A) smartphone apps and flash drives are complements, and smartphone apps and smartphones are substitutes.
B) smartphone apps, flash drives, and smartphones are all complements.
C) smartphone apps and flash drives are substitutes, and smartphone apps and smartphones are complements.
D) smartphone apps, flash drives, and smartphones are not all complements.
C
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Recent evidence regarding the exchange-rate pass-through effect in the U.S. reflects a declining trend. How can this be explained?
What will be an ideal response?
The most frequently reported price index is ________
A) the consumer price index (CPI) B) the gross domestic product (GDP) deflator C) the personal consumption expenditure (PCE) deflator D) chain weighted GDP E) the interest income deflator
A physician's office expenses increase 10 percent, so she decides to raise the price of office visits. Assuming the demand curve for office visits does not shift, what will happen to the total number of office visits and practice revenues?
a. Office visits and total revenue stay the same if demand is elastic. b. Office visits and total revenue rise if demand is inelastic. c. Office visits and total revenue fall if demand is inelastic. d. Office visits will fall and total revenue will rise if demand is inelastic. e. Office visits will rise and total revenue will fall if demand is elastic.
Assume that Burger King employees work in an air-conditioned environment while McDonalds employees do not. Other things equal, you would expect wages to be ____ in Burger King because ____.
a. higher; Burger King is a more prestigious place to work b. higher; Burger King employees are more productive c. lower; McDonald's employees are more productive d. lower; Burger King has more favorable working conditions