Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall. Holding everything else constant, how would this affect the market for wheat (a substitute for corn)?
A) The demand for wheat would decrease and the equilibrium price of wheat would decrease.
B) The demand for wheat would increase because consumers could afford to buy more wheat and corn.
C) The demand for wheat would decrease and the equilibrium price of wheat would increase.
D) The supply of wheat would increase and the equilibrium price of wheat would decrease.
A
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What will be an ideal response?
Monetarists argue that the interest elasticity of the demand for money is
a. low, while Keynesians say it is high. b. important in terms of affecting economic activity. c. highly variable. d. an important factor in determining if velocity is stable or unstable.
The law of marginal diminishing returns
A) is found everywhere. B) is found only in manufacturing. C) is found only in developed economies. D) is the same as the law of diminishing marginal utility.
When economists say investment is autonomous, they mean that investment is independent of the level of saving.
a. true b. false