Two goods are complements if:
A. an increase in the price of one good leads to a decrease in demand for the other.
B. people tend to consume either one or the other.
C. an increase in the price of one good leads to in increase in demand for the other.
D. there are no substitutes for either of them.
Answer: A
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Which of the following will cause an inward shift of the production possibilities curve of an economy?
A) A decrease in the demand for goods and services B) Introduction of better technology C) A decline in the size of the labor force D) An increase in the opportunity cost of the goods being produced
How are the fundamental economic questions answered in a market economy?
A) Large corporations alone decide the answers. B) Households and firms interact in markets to decide the answers to these questions. C) Individuals, firms, and the government interact in markets to decide the answers to these questions. D) The government alone decides the answers.
Which of the following describes a problem created by scarcity?
A. The course you need to take in the fall is offered at times that conflict with your work schedule. B. The White House eliminates tours due to budget constraints. C. Your cell phone battery is low and you screen a phone call from afriend in case your significant other calls later. D. All of these.
In general, the amount people pay for insurance is:
A. lower than its expected value. B. higher than its expected value. C. higher than its future value. D. lower than its present value.