A change in the price of carrots will cause a movement along the demand curve for carrots and a shift in the demand for substitute vegetables.
Answer the following statement true (T) or false (F)
True
This statement correctly illustrates the distinction between a movement along and a shift in the demand curve.
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The figure above shows one of Bob's indifference curves for CDs and books
a) Is the indifference curve steeper at point a or point b? b) What is Bob's marginal rate of substitution at point a? c) What is Bob's marginal rate of substitution at point b?
When the government creates a monopoly, the social loss may include
a. declining marginal costs. b. the cost of lawyers and lobbyists hired to convince lawmakers to continue the monopoly. c. excessive monopoly profits. d. diminishing marginal revenue.
The amount a person earns over and above the amount she/he would be willing to work for is called
A. marginal resource cost. B. economic rent. C. marginal revenue product. D. profit on human capital.
Edgar and Felicity are players in an ultimatum game for $100, where Felicity is the proposer and Edgar is the responder. Suppose that Felicity proposes that she receive $95, while Edgar receives only $5. How would behavioral economists expect Edgar to
respond? A. Even though Edgar would be better off having $5 versus nothing, Edgar will likely see the offer as unfair and reject it. B. Edgar will accept the $5, as rejecting it would be economically irrational. C. Edgar will suggest a counteroffer that he would accept. D. Edgar will accept the offer if he is thinking with brain System 1 but reject it if thinking with brain System 2.