Two goods, X and Y, are complementary goods if the demand for X:
a. increases when the price of Y increases.
b. increases when income increases.
c. decreases when the price of Y increases.
d. increases as the price of its substitute good increases.
e. decreases as the price of its substitute good decreases.
c
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In the Ricardian model, if a country's trade is restricted, this will cause all EXCEPT which?
A) limited specialization and the division of labor B) reduced volume of trade and reduced gains from trade C) nations to produce inside their production possibilities curves D) a country to produce some of the product of its comparative disadvantage E) raised costs as more diverse product is produced internally
Speculators in derivatives markets
A) reduce the efficiency of these markets. B) are acting contrary to U.S. securities laws. C) accept risk transferred to them by hedgers. D) reduce the liquidity of these markets.
Suppose a gardener produces both tomatoes and squash in his garden. If he must give up 8 bushels of squash to get 5 bushels of tomatoes, then his opportunity cost of 1 bushel of tomatoes is
a. 0.63 bushels of squash. b. 1.6 bushels of squash. c. 3 bushels of squash. d. 5 bushels of squash.
A change in the average price level is called ________, while a change in the price of a specific good in comparison with other goods and services is called ________.
A. a change in a relative price; inflation B. a quality adjustment; a substitution bias C. a price level adjustment; a quality adjustment D. inflation; a change in a relative price