If an increase in income leads to a decrease in the demand for ground beef, then ground beef is a(n):
A. inferior good.
B. complementary good.
C. substitute good.
D. normal good.
Answer: A
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Once an equilibrium is achieved, it can persist indefinitely because
A) shocks that shift the demand curve or the supply curve cannot occur. B) shocks to the demand curve are always exactly offset by shocks to the supply curve. C) the government never intervenes in markets at equilibrium. D) in the absence of supply/demand shocks no one applies pressure to change the price.
Given that the own-price elasticity of demand for shoes is -2.6, if the price of shoes rises by 8%, what will happen to the quantity of shoes demanded?
a. It will decrease by 20.8% b. It will increase by 20.8% c. It will decrease by 2.6% d. It will decrease by 2.6%
The most extensive indexing in the United States is in
a. interest payments on bonds or savings accounts. b. government transfer payments, including Social Security benefits. c. government contracts for military goods. d. escalator clauses in wage and salary contracts.
Graphically, we can think of the marginal product of a factor as the:
A. additional inputs associated with producing one more unit of output. B. slope of the total production curve, when output is plotted against the quantity of the input that is used. C. slope of the total cost curve, when output is plotted against the costs of the quantity of the inputs used. D. additional cost associated with producing one more unit of output.