Dillon is undecided about whether to eat at a restaurant or to order pizza at home. He then obtains a coupon for 10 percent off at the restaurant and decides to go there to eat. This is an example of
A) someone using criteria other than price to make a consumption decision.
B) a lower price leading a consumer to substitute more of the less expensive good for the relatively more expensive good.
C) a lower price leading a consumer to buy more of a good because of the income effect.
D) a consumer making a decision irrationally.
Answer: B
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The decisions General Motors makes in determining production levels for its Chevy Volt is an example of a microeconomics topic
Indicate whether the statement is true or false
In economic theory, we assume that the goal of the firm is to:
a. maximize sales revenue. b. maximize market share. c. maximize the benefits it provides to its customers. d. maximize the profit. e. maximize the sales volume.
Which of the following will increase interest rates in the short run?
A. An decrease in reserve requirements B. Open-market sales by the Fed C. A decrease in real GDP D. A decrease in the price level
If the expected price of oil rises, then
A. the equilibrium price and quantity will not change. B. the current equilibrium price will rise, and the current equilibrium quantity will fall. C. the current equilibrium price and quantity will both rise. D. the equilibrium price will rise, but the change in the equilibrium quantity will depend on whether the demand change outweighs the supply change.