If the price of a normal good is measured along the vertical axis and its quantity along the horizontal axis, an increase in the price of the good will lead to
A. an upward movement along the demand curve.
B. a rightward shift of the demand curve.
C. a downward movement along the demand curve.
D. a leftward shift of the demand curve.
Answer: A
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Tomas increased his consumption of potato chips when the price of pistachios increased. For Tomas, potato chips and pistachios are
A) both luxury goods. B) substitutes in consumption. C) both inferior goods. D) complements in consumption.
Which of the following is likely hardest to resell?
A) An Apple iPod B) A discount airline ticket you bought with your frequent flyer miles C) A used car D) The free spa treatment you won at a raffle
Elinor Ostrom won the 2009 Nobel Prize in economics for her research showing:
A. social norms can sometimes be powerful enough for commonly held property to be managed extremely well. B. social norms are not an effective solution for the management of commonly held property. C. that privatization of public goods is the most effective solution to market failure associated with commonly held property. D. government provision of public goods is the most efficient solution to the tragedy of the commons problem.
Suppose the economy is in long-run equilibrium. If the federal government cuts government spending, which of the following is likely to result?
A) an increase in real GDP and an increase in the price level B) an increase in unemployment and an increase in the price level C) a decrease in unemployment and a decrease in the price level D) a decrease in the price level and an increase in unemployment