Identify the correct statement.
a. If the price level increases, we feel poorer and buy less
b. If the price level increases, we feel richer and buy more.
c. If domestic prices increase, we substitute domestic goods for imported ones.
d. An increase in the price of a particular good leads to a substitution.
e. A decrease in the price of a particular good is like an increase in income and therefore we buy more.
a
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The term "free riders" refers to people who:
A) selflessly pay for others' consumption of goods and services. B) make economic decisions randomly and are not rational. C) haggle over the prices of the goods and services that they buy. D) don't contribute but still benefit from others' actions.
Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?
A) a drought that sharply reduces cotton output B) an increase in consumer income C) a decrease in consumer income D) unusually good weather that results in a bumper crop of cotton
The effect on total market demand from the advertising of a specific brand will
A) always be positive. B) always be negative. C) often be positive. D) often be negative.
Scarcity is best defined as
a. unlimited resources b. a shortage -- when buyers cannot obtain the goods they want c. a surplus -- when sellers cannot sell the goods they produce d. insufficient resources to satisfy unlimited wants e. the private ownership of society's resources