Assume two goods are substitutes. Ceteris paribus, a decrease in the price of one good will cause the equilibrium price of the other good to
A. Decrease and the equilibrium quantity of the other good to decrease.
B. Decrease and the equilibrium quantity of the other good to increase.
C. Increase and the equilibrium quantity of the other good to decrease.
D. Increase and the equilibrium quantity of the other good to increase.
Answer: A
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A shift in the demand curve will occur when
A) supply shifts. B) the price of an input used to produce the good changes. C) consumers' income changes. D) the price of the product changes.
If the wage rate doesn't change but a profit-maximizing competitive firm hires fewer workers, we know that
A) the price of the product increased. B) technical change occurred that increased labor productivity, reducing the firm's demand for labor. C) demand for the product fell or there has been a reduction in labor productivity. D) marginal factor cost increased.