If tablet computers are considered substitutes for e-readers, the decline in the price of e-readers would, all else equal,
A) increase the demand for tablet computers.
B) decrease the demand for tablet computers.
C) increase the quantity of tablet computers demanded.
D) decrease the quantity of tablet computers demanded.
Answer: B) decrease the demand for tablet computers.
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Workers at an automobile firm are laid off because the economy is weak and the demand for automobile has fallen. This is an example of _____
a. cyclical unemployment b. structural unemployment c. frictional unemployment d. seasonal unemployment
The price paid for the use of borrowed money:
a. Ponzi payment b. deed bond c. interest d. millage note
Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:
A. supply has decreased and equilibrium price has increased. B. demand has increased and equilibrium price has decreased. C. demand has increased and equilibrium price has increased. D. demand has decreased and equilibrium price has decreased.
Sara looks into her closet and discovers a pair of like-new shoes she no longer wears because they are out of fashion. From the economist's perspective, was Sara behaving rationally when she bought those shoes?
A) No. If any of a person's decisions have poor results, that person is irrational. B) Yes, Sara didn't buy those shoes when they were out of fashion. C) No. The rationality assumption states that rational people never make mistakes. D) It's not clear because psychology, not economics, deals with the rationality assumption.