If an increase in the price of peanut butter causes a decline in the demand for jelly, then
a. the goods are substitutes
b. jelly is an inferior good
c. the goods are complements
d. both goods are inelastic
e. peanut butter is an inferior good
C
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Government consumption expenditures equal
A) government outlays minus transfer payments. B) government outlays minus net interest payments. C) government purchases minus government investment. D) the government primary deficit plus net interest payments.
A farmer has 100 acres of land on which he can grow soybeans or corn. An acre of land yields 200 bushels of soybeans or 100 bushels of corn. The above figure refers to the farmer's
A) production possibilities curve. B) substitution options curve. C) demand curve. D) opportunity cost curve.
When a price ceiling is set below the equilibrium price, quantity demanded will exceed quantity supplied resulting in
a. excess demand or shortages. b. excess supply or surpluses. c. equilibrium prices. d. price controls.
Figure 7-11
Refer to . As price falls from PA to PB, which demand curve represents the most elastic demand?
a.
D1
b.
D2
c.
D3
d.
All of the above are equally elastic.