Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause a(n)
a. decrease in the demand for sugar and a decrease in the quantity supplied of sugar.
b. decrease in the supply of sugar and a decrease in the quantity demanded of sugar.
c. decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar.
d. increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar.
a
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Use the graph below to answer the next question.
Other things equal, an increase in labor productivity would cause a
A. move from a to b on D1. B. move from b to a on D1. C. shift from D2 to D3. D. shift from D3 to D2.
A product that has a negative income elasticity of demand is ________ good
A) a complementary B) a substitute C) a normal D) an inferior E) a negative
The economic analysis of extending the duration of unemployment benefits to 99 weeks involves both positive and normative analysis. Consider the following consequences of extending the duration of unemployment benefits:
a. Extending the duration of unemployment benefits to 99 weeks will create less incentive for some unemployed workers to seek employment. b. Extending the duration of unemployment benefits to 99 weeks will increase the total amount of government expenditure on unemployment benefits. c. The benefits received by those collecting unemployment benefits should be valued more highly than the increase in government expenditure needed to pay the benefits. d. By extending the duration of unemployment benefits to 99 weeks, the unemployed will have more time to acquire new skills before reentering the workforce. Which of the consequences above are positive statements and which are normative statements? A) a and b are positive statements; c and d are normative statements. B) Only b is a positive statement; a, c, and d are normative statements. C) a and d are positive statements; b and c are normative statements. D) a, b, and d, are positive statements; only c is a normative statement.
The Business Cycle has three main parts, which of these is not one of them?
a. Expansion b. Recession c. Inflation d. Recovery