Surveys show that a small increase in the price of organic potatoes will cause most people to switch to other alternatives such as packaged mashed potatoes. This finding suggests that the demand curve for organic potatoes is
a. relatively steep.
b. relatively flat.
c. upward sloping.
d. vertical.
b. relatively flat.
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A firm that knows the market price for its product and its costs can determine how much output that they wish to produce.
Answer the following statement true (T) or false (F)
If the substitution effect of a lowered price is partly or fully offset by the income effect, we know that the good in question is a(n)
a. complementary good b. inferior good c. luxury good d. normal good e. substitute good
If the center nation operates under a cooperative peg agreement, how does the cooperation work?
A) The home nation will try to resist any changes coming from the center. B) The home nation will accept all changes coming from the center without discussion. C) The center nation will make policy concessions to other nations in its cooperative currency agreement. D) Cooperation usually does not work well.
The "monetary policy transmission mechanism" connects
A. individual income tax rates to aggregate supply. B. open market purchases to the Fed's balance sheet. C. short-term interest rates to aggregate demand. D. individual income tax rates to aggregate demand.