If the sales of carbonated sodas continue to decline as more cities impose soda taxes on these beverages, this will likely
A) increase the demand for premium water, because premium water and carbonated sodas are considered complements.
B) increase the demand for premium water, because premium water and carbonated sodas are considered substitutes.
C) decrease the demand for premium water, because premium water is considered an inferior good and carbonated sodas are considered normal goods.
D) decrease the demand for premium water, because premium water is considered a normal good and carbonated sodas are considered inferior goods.
Answer: B
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Holding other factors constant, a technological improvement that increases the marginal product of capital will:
A. decrease national saving. B. decrease investment. C. increase investment. D. increase national saving.
Excess reserves immediately decrease if
A) reserve requirements increase. B) reserve requirements decrease. C) the discount rate increases. D) the discount rate decreases.
Figure 4.5 illustrates a set of supply and demand curves for hamburgers. A decrease in supply and a decrease in demand are represented by a movement from:
A. point c to point a. B. point b to point d. C. point d to point a. D. point a to point b.
Which of the following statements about market failure is not true:
A. Market failure causes an inefficient allocation of resources, even in a competitive market B. Market failure can come from causes on the demand-side or the supply-side of a market C. Market failure always results from some government action or policy in a market D. Market failure can result from the number of sellers in a market being too few to ensure competition