If the demand curve for bologna shifts to the right as income falls then bologna is a(n):
A. normal good.
B. substitute good.
C. inferior good.
D. complementary good.
Answer: C
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Suppose a $1 tax is placed on a good. The more elastic the supply of the good, the
A) larger the increase in the after-tax price. B) smaller the decrease in the quantity sold. C) less of the tax will be paid by the buyers. D) more of the tax will be paid by the sellers.
When a firm is experiencing diseconomies of scale
A) the MP curve has a negative slope. B) the LRAC curve has a positive slope. C) it must also experience diminishing returns to labor. D) the MC curve has a negative slope.
What does the phrase "internalizing an external cost" mean?
A) limiting the extent to which domestic firms can outsource production B) prohibiting economic activities that create externalities C) forcing producers to factor into their production costs the cost of the externalities created in the production of their output D) finding a way to address cross-border pollution
One of the basic differences between social and economic regulations is that
A. economic regulations cover only particular industries while social regulations apply to all firms in the economy. B. social regulations only apply to non-profit organizations while economic regulations apply only to for-profit organizations. C. economic regulations focus on the banking industry while social regulations focus on monopolies. D. economic regulations only apply to financial institutions while social regulations apply to a greater variety of institutions.