When consumers shift away from relatively higher price goods and services in favor of those that are less expensive, this is known as the
A) principle of utility.
B) principle of substitution.
C) principle of supply.
D) principle of increasing opportunity costs.
Answer: B
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The market prices of existing bonds are
A) inversely related to the interest rate. B) stated in terms of the interest rate. C) not related to the interest rate. D) directly related to the interest rate.
Which of the following is true of a payoff matrix?
A) It is the representation of only the best response of each player. B) It takes into account all relevant costs and benefits associated with each action of the players. C) It shows the payment made to each factor of production for the production of a good. D) It does not represent all the costs and benefits associated with the choices of the players.
The _____ of using the market for corporate control make it important to build incentives into executive pay packages that can reduce _____ by better aligning the incentives of shareholders and managers
a. benefits; principal/agent problems b. costs and uncertainties; principal/agent problems c. benefits; influence costs d. costs and uncertainties; influence costs
When one country can produce a given amount of a good using fewer inputs than any other country,
A. Specialization will definitely increase worldwide consumption possibilities. B. It always has a comparative advantage in producing the good. C. Specialization will definitely increase worldwide production possibilities. D. It has an absolute advantage in producing the good.