If two goods are close substitutes:
a. Consumers will always buy the one that has the lower price
b. An increase in the price of one causes the demand for the other to decrease
c. A decrease in the price of one causes an increase in the demand for the other
d. A fall in the price of one will decrease the demand for the other
Answer: d. A fall in the price of one will decrease the demand for the other
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Assume that the U.S. dollar depreciates against the Japanese yen. What is the impact on aggregate expenditures and income?
A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases.
Which of the following statements is always true? a. An increase in price will lead to an increase in producer surplus along a supply curve. b. An increase in price will lead to an increase in consumer surplus along a demand curve. c. A price ceiling will lead to an increase in consumer surplus
d. A price floor will lead to an increase in consumer surplus.