If the price of apples falls and apples and oranges are substitutes, we would expect:
a. The quantity of apples demanded to increase and the demand for oranges to increase.
b. The quantity of oranges demanded to decrease and the demand for apples to increase.
c. The quantity of apples demanded to increase and the demand for oranges to decrease.
d. The quantity of oranges demanded to decrease and the demand for apples to decrease.
Answer: c. The quantity of apples demanded to increase and the demand for oranges to decrease.
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Refer to the above figure. Suppose point A is the original equilibrium. If there is an increase in the money supply, the new long-run equilibrium is given by point
A) A. B) B. C) C. D) D.
By donating $1,000 to the Salvation Army, Caroline reduces her taxable income. To Caroline, the reduction in her taxable income is
A) an incentive. B) an opportunity cost. C) the margin. D) a marginal benefit. E) a marginal cost.
Whenever marginal revenue is greater than marginal cost, a profit-maximizing firm should reduce its output
a. True b. False Indicate whether the statement is true or false
The imposition of a per unit tax on a product
A. will cause the supply curve to shift upward and to the left. B. will cause the supply curve to shift downward and to the right. C. will reduce the quantity supplied of the product. D. will encourage producers to increase the quantity supplied of the product.