When the price of one fruit increases, consumers buy more of another fruit. This situation is an illustration of:
a. The rationing function of prices
b. The income effect
c. The substitution effect
d. Diminishing marginal utility
c. The substitution effect
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How are a firm's short-run and long-run average cost curves related?
a. SRAC is greater than LRAC, which forces the LRAC curve to be upward sloping. b. SRAC and LRAC slope up or down together, but SRAC is always the steeper of the two curves. c. The SRAC curve is tangent to and lies above the LRAC curve. d. The LRAC curve just touches the SRAC curve at its minimum point.
An increase in supply causes
A) quantity supplied to decrease. B) supply and price to increase. C) price to decrease. D) price to increase.
When a foreign company engages in riskier behavior after it has received international investment funds, it is known as
A) portfolio investment. B) moral hazard. C) foreign direct investment. D) adverse selection.
Some of the activities of Chase Manhattan are organized by product, some by geography, and some by customer. Therefore, Chase Manhattan is said to have a(n)
A. Uform of business organization. B. mixed design. C. Mform of business organization. D. network organization.