Suppose that when the price of ice cream increases, Liza decreases her purchase of hot fudge. To Liza
A) ice cream and hot fudge are complements.
B) ice cream and hot fudge and substitutes.
C) ice cream and hot fudge are normal goods.
D) ice cream is a normal good and hot fudge is an inferior good.
Answer: A
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If a contractionary monetary policy is adopted, ________
A) the real interest rate will fall B) real output will increase C) the price level will fall D) the demand for labor will increase
Mary has decided that the she does not like Iowa and has decided to quit her job as a medical technician and move to Arizona. Mary's unemployment as she searches for a new job is best classified as
A) traveling. B) structural. C) frictional. D) distance. E) cyclical.
New smartphone applications are developed to help consumers find the cheapest prices in the neighborhood. Therefore,
A) the local competitive will become more intensive. B) the prices of goods listed in the application will be lowered. C) price discrimination will occur against consumers without a smartphone or this application. D) All of the above.
The market clearing price of a good is
A) the price at which there is at least some of the good available for everyone. B) the price at which there is no surplus and no shortage. C) the price that consumers prefer. D) the price that producers prefer.