If consumers spend their money only on beef and vegetables, then the substitution effect of an increase in the price of beef would result in consuming ________ beef and ________ vegetables
A) more; more
B) less; fewer
C) more; fewer
D) less; more
B
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An external cost is a cost of producing a good or service that is
A) not paid by the producers. B) paid by the producers. C) paid by the government. D) paid by the consumer and the government.
One of the principal factors behind the U.S. trade deficits of the 1990s has been
a. slow growth and recession in many important trading partners. b. rapid growth and inflation in many important trading partners. c. significant depreciation of the dollar. d. rising real interest rates in the United States.
Firms that are price searchers
a. will eventually find and charge the highest price at which consumers will purchase any units. b. face inelastic demand curves for their products. c. do not confront rival sellers like price takers do. d. face a downward-sloping demand curve.
Explicit agreements between businesses to keep prices high:
A. are illegal. B. are not in the public's best interests. C. are called collusion. D. All of these statements are true.