The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of sandwiches, which for consumers are substitutes for pizza?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
A
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The reservation value of a buyer reflects her ________
A) willingness to pay for a good or service B) trade-off between buying various goods and services C) total utility from a good or service D) total income
Why is the demand for a luxury generally more elastic (or less inelastic) than the demand for a necessity?
What will be an ideal response?
Which of the following is an example of government purchases?
A. The navy purchases a new ship for its fleet. B. Fred buys a new television set to watch the Super Bowl. C. Electric Car Incorporated increases the number of cars on its lots. D. The Black Coal Company sells $5 million of coal to Germany.
An economic variable that moves in the same direction as aggregate economic activity (up in expansions, down in contractions) is called
A) procyclical. B) countercyclical. C) acyclical. D) a leading variable.