Which of the following statements is true of complementary goods and services?
a. Their production does not depend on the resource availability of a firm.
b. Their demand patterns are in sync with other goods and services produced by a firm.
c. They cannot use the excess capacity available during the off-season.
d. They are produced to balance seasonal demand cycles.
Answer: d. They are produced to balance seasonal demand cycles.
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What will be an ideal response?
In 1995, the Boskin commission identified which of the following problems with the computation of the CPI?
A) it does not account for the fact that consumers can substitute away from products as they get more expensive B) an increase in price could be the result of quality improvements rather than an increase in the cost of living C) it often does not reflect decreases in the cost of living that occur when new goods are introduced D) all of the above E) none of the above
A shift in the demand curve to the right represents
A) an increase in demand. B) a decrease in demand. C) an increase in quantity demanded. D) a decrease in quantity demanded.
Consider the AD/AS model. The interest rate effect is reflected on the _______ and when the price level _________________
a. AS curve; rises, people feel poorer and buy less b. AS curve; rises, goods become more expensive and foreigners buy less c. AS curve; rises, interest rates fall, and people buy less d. AD curve; rises, interest rates rise, and people buy less e. AD curve; falls, interest rates fall, and people buy less