Expenditure switching refers to
A) a switching back and forth between investment and consumption expenditures.
B) a switching back and forth between domestic and foreign goods in response to changes in the exchange rate.
C) a switching back and forth between domestic and foreign goods in response to changes in the interest rate.
D) a switching of back and forth in the current account from a deficit to a surplus and vice versa.
B
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Refer to Figure 9.3. If the market is in equilibrium, total producer surplus is
A) $2. B) $3. C) $200. D) $400. E) $600.
If Greg uses a special glue to make model planes that he sells and the price of his model planes increases, then one would expect that the equilibrium price of the special glue would _______ and the equilibrium quantity would _________
a. increase; decrease b. decrease; increase c. increase; increase d. decrease; decrease e. increase; indeterminant
Entry by new firms into a monopolistically competitive market
a. creates additional consumer surplus. b. imposes a positive externality on existing firms. c. leads to the same externalities that are observed when new firms enter a perfectly competitive market. d. increases the demand for existing firms' products.
"As the price of apples goes up, the demand for apples goes down." The author of this statement
A) implies that price and demand are unrelated. B) uses the word "demand" when he should use the word "supply." C) uses the word "demand" when he should use the words "quantity demanded." D) implies that demand and price have a direct relationship.