Suppose the price of beef declines by $0.50 per pound at the supermarket. Consumers of beef immediately increase their purchases of beef. This illustrates:
a. the fact that beef is an inferior good.
b. the cross-elasticity effect of a price decrease.
c. the substitution effect of a price decrease.
d. the fact that beef is an economic bad.
e. the income effect of a rise in price.
c
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A major difference between monopolistic competition and perfect competition is
A) that products are not standardized in monopolistic competition unlike in perfect competition. B) the barriers to entry in the two markets. C) the degree by which the market demand curves slope downwards. D) the number of sellers in the markets.
Intraindustry trade refers to
A) international trade of products made within the same industry. B) international trade of products made across different industries. C) trade that occurs as a result of comparative advantage. D) the exchange of non-similar items. E) trade that occurs mostly within developing countries.