Which of the following examples best illustrates the concept of derived demand?
A) An increase in the price of beef results in an increase in the demand for fish.
B) The higher the demand for automobiles, the greater the demand for steel.
C) The demand for Pepsi varies directly with the price of Coke.
D) The demand for a good varies inversely with its price.
B
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Which of the following is a problem in pursuing monetary policy?
A) The lag between a change in the quantity of money and its effect on economic activity may be long. B) The Fed must reveal to the public anytime the Fed changes its policy. C) Monetary policy must be approved by the Congress. D) The Fed cannot control the federal funds rate. E) None of the above answers is correct.
Show, using utility theory, why a consumer who is initially maximizing her utility will alter her consumption pattern in response to a change in the price of a good
When people’s income increases, demand for science fiction novels increases. The novels are
a. an inferior good. b. substitutes. c. a normal good. d. regular goods.
A monopolist will maximize profits by
a. setting the price at the level that will maximize per-unit profit. b. producing the output where marginal revenue equals total cost and charging a price along the demand curve. c. selling at the price on the demand curve at the output rate where marginal revenue equals marginal cost. d. producing at the output rate where price equals marginal cost.