When the price of peaches went up, people bought fewer peaches and more strawberries. This is an indication that tastes have changed as a result of the price increase.
Answer the following statement true (T) or false (F)
False
Rationale: This is an indication the optimal quantity demanded has changed as a result of the increase in price --- and the optimal quantity demanded results from tastes confronting economic circumstances. The change in the price of peaches is a change in circumstances --- which in turn affects demand, not a change in tastes.
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A) cannot have a comparative advantage in producing any product. B) perform all tasks at a higher opportunity cost than others. C) can still have a comparative advantage in producing some product. D) must have an absolute advantage in at least ones task.
Which of the following statements about crowding out is false?
A. It is not caused by a budget surplus. B. It is caused by a budget deficit. C. It can completely offset the government's debt D. It affects interest rates and not economic growth.
If firms in a monopolistically competitive market are earning economic profits greater than zero in the short run, then in the long run:
A. firms will exit this market. B. profits will increase. C. profits will decrease. D. demand will not change.
John Maynard Keynes' most notable published work is entitled
A. Capitalism Doomed. B. The Communist Manifesto. C. Freakonomics. D. The General Theory of Employment, Interest, and Money.