The price of pizza falls relative to the price of spaghetti, so people buy more pizza instead of spaghetti. This is an example of responding to:
A. incentives.
B. marginal science.
C. sunk benefit.
D. disincentives.
Answer: A
You might also like to view...
If resources are underemployed, then the economy is producing as much as possible
Indicate whether the statement is true or false
Which of the following is true?
a. Taxes and transfers generally increase the income share of the bottom quintile of income recipients, while reducing the share of the top group of earners. b. In a market economy, the distribution of income is determined by the quantity and value of the resources supplied by the various individuals, and nearly half the value of resources owned by the rich was inherited. c. Between 1980 and 2009, the income share received by the highest quintile of earners fell, while the share received by the bottom quintile of earners rose. d. All of the above are true.
Which of the following is the best example of capital?
A. a family buying a newly produced home B. a shoe store adding to its inventories C. a ship used to carry oil across the ocean D. the production and sale of a new delivery van for UPS
Suppose that the percentage change in supply is 20%, the price elasticity of demand is 3, and the price elasticity of supply is 2. What is the percentage change in the equilibrium price?
A. 4% B. 5% C. 15% D. 20%