Which statement is an example of substitute goods affecting demand?
a. A bumper crop of cotton lowers the price of cotton clothing. Sales of silk shirts decrease.
b. As laptop computer sales increase, so do the sales of computer cases.
c. An automobile maker lays off thousands. Sales of electronic goods in that city fall.
d. Hi-tech companies lure people to a region. Demand for housing rises.
Answer: a. A bumper crop of cotton lowers the price of cotton clothing. Sales of silk shirts decrease.
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A nation's economic growth is more rapid when
A) special interest groups acquire the political power to restrict competition. B) capital resources are devoted to their most efficient use. C) there are barriers to establishing legal ownership of capital resources. D) scarce resources are made available for all citizens free of charge.
Why does the U.S. government maintain a monopoly in the delivery of first-class mail? Does the Postal Service nevertheless face other forms of competition?
As the quantity of labor increases, value of marginal product for a perfectly competitive firm
A) decreases because the firm must lower its price to sell a larger quantity. B) decreases because the marginal product of labor decreases. C) decreases because marginal revenue decreases. D) is constant because marginal revenue is constant.
How do public goods differ from private goods?
What will be an ideal response?