Demand for clothing tends to be
a. elastic because there are few substitutes for clothing
b. inelastic because there are few substitutes for clothing
c. elastic because expenditures for clothing represent a large part of the consumer's budget
d. inelastic because expenditures for clothing represent a large part of the consumer's budget
e. elastic because it is a broadly defined good
B
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Suppose Target decided to lower the price on all shirts as part of its Back to School promotion. The cross elasticity of demand between pants and shirts is negative
Lowering the price on shirts will ________ the demand for pants because shirts and pants are ________. A) increase; substitutes B) decrease; substitutes C) increase; complements D) decrease; complements
If investment becomes more interest-sensitive,
A) monetary policy will have a smaller impact on the equilibrium interest rate. B) monetary policy will have a greater impact on equilibrium income. C) fiscal policy will have a smaller impact on equilibrium income. D) fiscal policy will have a larger impact on the equilibrium interest rate.
Game theory tells us that in the ultimatum game:
A. the threat to reject is credible and is expected to increase the amount given. B. the threat to reject in not credible, and is not expected to increase the amount given. C. the threat to reject is credible, but is not expected to increase the amount given. D. the threat to reject in not credible, but still is expected to increase the amount given.
If leakages are less than injections, ceteris paribus:
(a) National income will increase. (b) National income will decrease. (c) National income will stay in equilibrium. (d) None of the above.