If you are grocery shopping and you see that the price of beef has risen, and as a result, you change your planned menu for the week and buy chicken instead, the reason your demand curve for beef is downward sloping has mostly to do with
A. the real-balances effect.
B. the substitution effect.
C. diminishing marginal utility.
Answer: B
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For many years, AT&T required customers to rent telephones from AT&T in order to receive phone service. This is an example of:
a. price discrimination. b. a tying contract. c. an interlocking directorate. d. exclusive dealing.
Expansionary fiscal policy may have an even smaller effect on aggregate demand in the open economy than a closed economy
a. True b. False Indicate whether the statement is true or false
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Many college campuses use student ID cards as a way for students to pay for on-campus expenses, such as books, photocopies, and food. For convenience, some students will maintain a balance on their ID cards. Are these balances a means of payment? Are they a store of value? Explain why or why not.
What will be an ideal response?