When the price of a good rises, consumers buy a smaller quantity because of the ________ effect and the ________ effect
A) substitution; income
B) normal; inferior
C) substitute; complement
D) supply; demand
Answer: A
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If a good is scarce, does that imply that there is a shortage of it?
What will be an ideal response?
If technological breakthroughs in the internet cause large numbers of firms to consider investment projects they hadn't previously thought of, then
A) a shift in the supply of loanable funds will cause interest rates to rise. B) a shift in the supply of loanable funds will cause interest rates to fall. C) a shift in the demand for loanable funds will cause interest rates to rise. D) a shift in the demand for loanable funds will cause interest rates to fall. E) there will be an excess supply of loanable funds.
If the exchange rate has been $2.00 per British pound but now falls to $1.60 per British pound, there will be
a. more U.S. imports from Great Britain because the price of pounds has fallen. b. more exports to Great Britain because the price of pounds has risen. c. fewer exports to Great Britain because the price of the pound has risen. d. more U.S. exports to Great Britain since the price of the dollar has fallen. e. no change in either exports or imports.
If the firm's fixed costs double while variable costs are unchanged, then
a. marginal cost more than doubles. b. marginal cost doubles. c. marginal cost remains unchanged. d. average total cost remains unchanged. e. average variable cost doubles.