Which of the following correctly describes the result of a price increase for an inferior good?
A) The substitution effect causes the demand for the good to decrease; the income effect causes the demand for the good to increase.
B) Both the substitution effect and the income effect cause the consumer to buy less of the good.
C) The substitution effect causes the demand for the good to increase; the income effect causes the demand for the good to decrease.
D) The substitution effect causes the consumer to buy less of the good and the income effect causes the consumer to buy more of the good.
D
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Based on the figure above, which of the following factors could lead the supply curve to shift leftward from S0 to S1?
A) a rise in the U.S. exchange rate B) a fall in the U.S. interest rate C) a fall in the U.S. exchange rate D) a fall in foreign interest rates E) a rise in expected future U.S. exchange rate The figure above shows the market for foreign exchange in 2001 and 2009.
A firm will tend to follow competitors when they increase spending on R&D, but will not follow them when they decrease such spending
a. True b. False Indicate whether the statement is true or false
Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages
a. True b. False Indicate whether the statement is true or false
As a result of a successful attempt by government to cut the economic pie into more equal slices,
a. the pie gets larger, and there will be more pie overall. b. the pie gets smaller, and there will be less pie overall. c. it increases the reward for working hard, resulting in people producing more goods and services. d. those who earn more income pay less in taxes.