What must occur for a good to violate the Law of Demand?
A. The good must be normal and the income effect must be larger than the substitution effect.
B. The good must be normal and the substitution effect must be larger than the income effect.
C. The good must be inferior and the income effect must be larger than the substitution effect.
D. The good must be inferior and the substitution effect must be larger than the income effect.
C. The good must be inferior and the income effect must be larger than the substitution effect.
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Limits on a country's ability to use aid effectively are referred to as its
a. absorptive capacity b. bilateral aid c. conditionality d. grant element e. none of the above
When the monopolist decides to supply a given amount to the market, it will:
A. set the price equal to marginal cost. B. set the price higher than what demanders are willing to pay for that amount. C. only sell that amount if it charges what the demanders are willing to pay for that amount. D. set the price lower than the demand curve to create a perceived shortage.
What is the supply-side cause of instability according to the mainstream view?
What will be an ideal response?
Initially the beef and mutton markets are in equilibrium, then preferences shift away from beef and into mutton. If you are a cattle rancher, the best profit-maximizing strategy is to
A. shift some of your ranching capacity into cattle raising. B. decrease output so as to minimize short run losses. C. increase output so as to increase your market share. D. shut down.