Scenario 4.5 indicates that grilled cheese sandwiches and hamburgers are:
A) substitutes.
B) complements.
C) independent goods.
D) none of the above
A
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Peanut butter and jelly are complements for many consumers. Consider the market for peanut butter. If there is an increase in the price of jelly,
A) there is a shift in the supply curve for jelly. B) the price of peanut butter rises. C) the quantity of peanut butter increases. D) the demand curve for peanut butter does not shift; instead there is a movement along it. E) there is a movement along the supply curve of peanut butter.
A linear specification, Q = aK + bL, is not appropriate for estimating a production function because
A. the firm could produce positive levels of output at zero cost. B. the marginal products of the inputs are assumed constant. C. it does not allow the firm to substitute capital for labor. D. both b and c E. all of the above
What do economists mean when they characterize households and firms as forward looking?
What will be an ideal response?
Under international trade we export those goods for which we have a relatively low
A. materials cost. B. wage cost. C. accounting cost. D. opportunity cost.