Suppose the price of a good rises. When will the resulting substitution effect reduce the quantity demanded of the good?
a. Always.
b. Whenever the good is a non-Giffen good.
c. Only when the good is normal.
d. Only when the good is inferior.
a. Always.
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How, other than by adjusting price, do firms in monopolistic competition compete?
What will be an ideal response?
The problem of scarcity: a. exists because resources are limited relative to wants
b. exists because resources are unlimited relative to wants. c. can be eliminated through appropriate government intervention into markets. d. does not exist in communist societies.
Railroads, automobiles, television, computers, and genetic engineering are all examples of new industries that are believed by many economists to have triggered
a. innovation cycles b. all internal cycles c. all external cycles d. short-run cycles e. multiple-investment cycles
In her book on the American work week, economist Juliet Schorr argues that Americans work too much. Her argument may be interpreted as concluding that this behavior
A. increases GDP but decreases well-being. B. increases GDP and increases well-being. C. decreases GDP and decreases well-being. D. decreases GDP but increases well-being.