When income increases, the demand curve for X shifts rightward and the demand curve for Y shifts leftward. These shifts mean that
A) X and Y are complements.
B) X and Y both normal goods.
C) X is an inferior good and Y is a normal good.
D) X is a normal good and Y is an inferior good.
D
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Refer to Figure 3-2. A decrease in the price of substitutes in production would be represented by a movement from
A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
If producers believe that the increase in their relative prices is small relative to the increase in the general price level, then the slope of the short-run aggregate supply curve will be
A) zero. B) small. C) large. D) negative.
In order of their occurrence, the phases of the business cycle are:
A. peak, downturn, trough, upturn. B. peak, upturn, downturn, trough. C. peak, downturn, upturn, trough. D. peak, upturn, trough, downturn.
When one is considering costs of taking a trip in their car, the average cost per mile includes some items of cost that are not included in the marginal cost of a mile driven. This statement is
A. absurd because marginal costs do not apply to mileage costs. B. always false. C. always true. D. sometimes true and sometimes false depending on the circumstances.