To test the theory that if the price of pens rises, then pen purchases fall, an economist would
A. analyze data on the price of pens and the price of pencils without holding other factors constant.
B. investigate whether people purchase more pens when their income rises.
C. analyze data on pen purchases linked to the price of pens, holding other factors constant.
D. ask his or her friends if they would buy fewer pens when the price rises.
Answer: C
You might also like to view...
Repealing Regulation Q still left savings-and-loan associations with a problem: most of their __________ were still at __________ interest rates
A) assets; low B) assets; high C) deposits; low D) deposits; high
Suppose your university decides to increase parking fees in order to deal with the shortage of parking spaces. Nevertheless, the president of your student body convinces the university to pay back the amount spent on higher parking fees to students in the form of a rebate at the end of the school year. Therefore, the increase in parking fees will
A. not solve the parking shortage. B. will have no effect since it will be offset entirely by the rebate. C. make the parking shortage even worse. D. reduce demand for parking and hence alleviate the parking shortage.
Firms in monopolistic competition make products that are
A) perfect complements. B) close but not perfect complements. C) perfect substitutes. D) close but not perfect substitutes.
The analysis of the competition between Apple and Samsung in the smartphone market is based on
A) microeconomic model. B) educated guessing. C) intuitive reasoning. D) consumer surveys.