Macintosh and IBM computers are considered substitute goods. Other things constant, if IBM lowered its price, compared to the Mac, then
A) the demand for IBM computers would increase.
B) the demand for Mac computers would increase.
C) the quantity demanded for IBM computers would increase.
D) all of the above would occur.
C
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In the new Keynesian model, the effects on output of an anticipated aggregate demand shock are ________
A) less than if that event was unanticipated B) greater than if that event was unanticipated C) the same as would develop if that event was unanticipated D) independent of whether or not that event is anticipated or unanticipated
The successor organization to GATT that handles trade disputes among its member nations is the
A) World Trade Organization. B) European Union. C) General Agreement on Tariffs and Trade. D) North American Free Trade Agreement.
Suppose that Dianne Lindsay spends all her income on two goods, A and B, in a manner in which their marginal utility to price ratios are equal, i.e., MUa/Pa = MUb/Pb. If at that time the price of A is higher than the price of B, then she
a. should increase her consumption of A and decrease her consumption of B because the marginal utility of A is higher b. is already maximizing her total utility and should make no change c. should increase the consumption of B and decrease the consumption of A because the price of B is lower d. should increase the consumption of both A and B since the ratios are equal e. has made an irrational choice
Carlos can buy either sushi or eggrolls. If the prices of sushi and eggrolls triple and Carlos's money income doubles, we can deduce that Carlos's budget constraint will
A. shift out but remain parallel to the old one. B. shift in but remain parallel to the old one. C. swivel in so that the slope of the budget constraint is doubled. D. remain unchanged.