If the demand for baseballs increases, then as a result, it is highly likely that the demand for:
A. leather will increase.
B. tennis balls will increase.
C. soccer balls will rise.
D. bats will decrease.
Answer: A
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Suppose one knows two facts: first, the market for prescription drugs experiences chronic shortages and second, the government sets the price for prescription drugs. One can conclude that the government has:
A. encouraged buyers to hoard prescription drugs. B. set the price too high. C. set the price above the equilibrium price. D. set the price below the equilibrium price.
In 2011, apples cost $1.49 a pound. Suppose the CPI was 120 in 2011 and 140 in 2012. If there is no change in the real price of an apple in 2012, what is the price of a pound of apples in 2012?
A) $2.74 B) $1.69 C) $1.66 D) $1.74 E) $1.28
In the stock valuation formula "good news" affects both the numerator and denominator. Conventional wisdom on Wall Street is that the effect on the __________ is __________ the effect on the __________
A) numerator; less than; denominator B) numerator; greater than; denominator C) numerator; the same as; denominator D) None of the above.
Which of the following is true from the perspective of the New Keynesian school of thought?
a. Fluctuations in private spending does not affect aggregate demand in an economy. b. Investment spending remains relatively constant irrespective of the supply shocks. c. Fluctuations in aggregate demand are not the primary source of problem for policymakers. d. The government should limit its role to administrative functions. e. Monetary and fiscal policies often fail to restore macroeconomic equilibrium.