It may be misleading to label a trade deficit as unfavorable or adverse because:
A. the multiplier does not apply to a trade deficit.
B. a trade deficit increases a nation's aggregate output and employment.
C. a nation's consumers benefit from a trade deficit during the period it occurs.
D. a trade deficit precludes inflation.
C. a nation's consumers benefit from a trade deficit during the period it occurs.
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Technological advancements have led to lower prices and an increase in the sale of digital cameras. How does this affect the digital photo printing paper market?
A) The demand curve for digital photo printing paper shifts to the left. B) The supply curve for digital photo printing paper shifts to the left. C) The supply curve for digital photo printing paper shifts to the right. D) The demand curve for digital photo printing paper shifts to the right.
The price elasticity of demand between milk and soda is likely to be:
a. negative, because the goods are complements. b. positive, because the goods are complements. c. negative, because the goods are substitutes. d. positive, because the goods are substitutes. e. 0, because the goods are not usually consumed by the same person at one time.
Between 1994 and 2004, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?
a. an increase in consumer income between 1994 and 2004 b. a reduction in the price of residential phone service, a substitute for cellular phone service c. an increase in the wages of workers in the cellular phone industry d. technological improvements that reduced the cost of supplying cellular phone service
The theory of consumer choice
a. underlies the concept of the demand for a particular good.
b. underlies the concept of the supply of a particular good.
c. ignores, for the sake of simplicity, the trade-offs that consumers face.
d. can be applied to many questions about household decisions, but it cannot be applied to questions concerning wages and labor supply.