In the case of a normal good,
A) demand curves always slope downward.
B) the income effect and substitution effect are in the same direction.
C) the Engel curve slopes upward.
D) All of the above.
D
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Under oligopoly, if one firm in an industry significantly increases advertising expenditures to capture a greater market share, it is most likely that other firms in that industry will
A. pursue a strategy to reduce advertising expenditures to maintain profits. B. decide to increase advertising expenditures even if it means a reduction in profits. C. increase the price of the product to improve profits and then increase advertising expenditures. D. make no changes in advertising expenditures because advertising is effective in the short run, but not the long run.
If a nation's government determines that consumption of cigarettes should be discouraged, then this means that the government has judged cigarettes to be a(n)
A) government-sponsored good. B) exclusive good. C) government-inhibited good. D) public good.
If technology dictates that labor and capital must be used in fixed proportions, an increase in the price of capital will cause a firm to use:
A. more labor as a consequence of the substitution effect. B. more labor as a consequence of the output effect. C. less labor as a consequence of the substitution effect. D. less labor as a consequence of the output effect.
Recall the Application about the study done about the perceptions and behavior of the unemployed in Great Britain to answer the following question(s).According to this Application, the more unhappy the unemployed individuals were about their situations:
A. the more likely they were to remain unemployed. B. the more aggressive they would be to try to find a job. C. the more they congregated around others who were unemployed. D. the longer they collected unemployment benefits.