Normal goods always obey the law of demand because, as the price of such a good rises, the
a. fall in quantity demanded due to the substitution effect is offset by a rise in quantity demanded due to the income effect
b. fall in quantity demanded due to the substitution effect is reinforced by a fall in quantity demanded due to the income effect
c. substitution effect will lead to an inward shift of the demand curve
d. substitution effect will lead to an increase in quantity demanded
e. rise in quantity demanded due to the substitution effect is offset by a fall in quantity demanded due to the income effect
B
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As economic growth rises, literacy rates tend to fall
a. True b. False Indicate whether the statement is true or false
Interest in environmental problems has intensified, perhaps because
a. for the first time in history in the 1970s people began to die from pollution-related diseases. b. rising incomes have caused people to be more concerned with the quality of their lives. c. the centrally planned economies are polluted. d. All of the above are true.
The basic ingredients in any economic decision are
a. scarcity and choice. b. surpluses and shortages. c. market prices and the use of efficient production methods. d. needs and wants.
When managers in oligopolistic firms make decisions that affect output or price, they must
A) also be sure they erect barriers to entry to prevent new entrants from affecting their plans. B) anticipate the reactions of their rivals and plan accordingly. C) register with the Antitrust Division of the Department of Justice. D) inform the regulators of their industry about their plans.