If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is
A) a neutral good.
B) a normal good.
C) a necessity.
D) a complement.
Answer: B
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Capital purchases by businesses of newly produced durables is known as
A. the income approach. B. inventory investment. C. the expenditure approach. D. fixed investment.
If firms in a price-taker industry were forced to install antipollution devices that increased their production costs, we should expect
A) the cost curves for the firms in this industry to shift downward. B) the market price of the product to decrease. C) that the firms in the industry would suffer long-run economic losses. D) that the firms in the industry would earn normal economic profits in the long run, as the higher production costs were passed along to consumers in the form of higher prices.
Is Europe an optimum currency area?
What will be an ideal response?
A surplus item is
A) the import of goods or services that is not needed by residents of a country. B) the import or export of products that are by-products of the manufacturing of export goods. C) any transaction that leads to a receipt by a resident of a country or its government. D) any transaction that leads to a payment by a resident of a country or its government.