Use the following general linear demand relation:Qd = 680 - 9P + 0.006M - 4PRwhere M is income and PR is the price of a related good, R. From this relation it is apparent that the good is:
A. an inferior good
B. a substitute for good R
C. a normal good
D. a complement for good R
E. both c and d
Answer: E
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Stock prices in Richland declined suddenly after one of the largest banks in Richland faced bankruptcy. If animal spirits play an important role in shaping Richland's economy, which of the following is likely to happen assuming all else equal?
A) Equilibrium unemployment in Richland will fall. B) Equilibrium wage levels in Richland will fall. C) Investment by firms in Richland will increase. D) Richland's consumption expenditure will increase.
The graph shown portrays a subsidy to buyers. The amount of money spent on this subsidy by the government is:
A. $3,600.
B. $2,400.
C. $6,000.
D. $800.
The entry of new firms into a competitive industry will very likel
a. shift the short run industry supply curve to the right b. cause the market price to fall c. reduce the profits of firms in the industry d. cause the market quantity sold to rise e. all of the above
When United States residents acquire assets abroad, they are in essence
A. borrowing money, and foreign debts to the United States decrease. B. lending money, and foreign debts to the United States decrease. C. borrowing money, and foreign debts to the United States increase. D. lending money, and foreign debts to the United States increase.