As a result of an increase in a product's price:
a. product supply increases
b. product supply decreases.
c. product supply does not change, but quantity supplied increases.
d. the impact on product supply is uncertain. Economic theory has no answer to this question.
c
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The Slutsky equation shows that, holding the total effect constant, the income effect will be larger for goods that
A) have a smaller substitution effect. B) make up a larger percentage of a household's budget. C) have perfectly inelastic demand curves. D) All of the above.
Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate producing units in many different countries, they are categorized as:
a. joint ventures. b. sole proprietorship firms. c. partnership firms. d. multinational firms. e. co-operative firms.
Which of the following statements is correct?
A. Low prices may not always be in the public interest. B. If prices on scarce resources are set “too low,” consumers will receive the “wrong” signals and be encouraged to consume more, thus squandering resources. C. Raising prices on scarce resources is generally politically unpopular. D. All of the responses are correct.
The right answer to the debate regarding the welfare effects of advertising is that
A. advertising always improves the functioning of the market. B. advertising always leads to positive economic profits in an industry. C. advertising always leads to concentration in an industry. D. there is no right answer.