If income doubles and the quantity demanded of good x more than doubles, then good x can be described as a:
a. substitute good.
b. complement good.
c. necessity.
d. luxury.
d
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What would not lead to an overall decrease in demand for air travel in the U.S.?
A) The fear of future terrorist attacks B) News of lengthy security delays at airports C) An expected decrease in airfares D) A substantial increase in bus and passenger train fares
Everything else held constant, an increase in interest rates on student loans
A) increases the cost of a college education. B) reduces the cost of a college education. C) has no effect on educational costs. D) increases costs for students with no loans.
If demand increases and supply decreases
A) the market clearing price definitely will increase, and the equilibrium quantity definitely will increase. B) the market clearing price definitely will increase, and the equilibrium quantity definitely will decrease. C) the market clearing price definitely will increase, but the change in the equilibrium quantity cannot be determined without more information. D) the equilibrium quantity definitely will decrease, but the change in the market clearing price cannot be determined without more information.
The management of a rental building faces a rent control situation, where it cannot charge more than $400 a month in rent on the apartment. The management knows that the apartments are high in demand and renters would be willing to be $1000 per month for them. The management will
a. Do nothing-it cannot violate the regulation b. Offer a bundle of both the apartment and furniture together for $1000 c. Offer the controlled rent but force the tenants to rent furniture from the management d. Both B&C