A result of a fall in the price of gasoline, consumers can afford to buy more gasoline for more driving trips. This is an illustration of:
A. The income effect
B. The substitution effect
C. Diminishing marginal utility
D. Consumer sovereignty
Answer: A
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Refer to Table 23-2. Using the table above, compute aggregate expenditure and identify the macroeconomic equilibrium
What will be an ideal response?
An increase in the effective tax rate on capital would cause the IS curve to
A) shift up and to the right. B) shift down and to the left. C) remain unchanged. D) remain unchanged if taxes are fully deductible from income; otherwise, shift up and to the right.
If Crunchy Fries agrees to sell its frozen potato fries to a large grocery chain on the contractual condition that the grocery chain does not sell any of Crunchy Fries' competitors' frozen potato fries, this is an example of ________.
A) a tying arrangement B) a horizontal contract C) a requirements contract D) an exclusive dealing contract
When unions cause wages to rise above the equilibrium wage,
a. a surplus of labor results. b. a shortage of labor results. c. the demand for labor rises. d. the demand for labor falls.