Assume that black beans and rice are consistently in the diet of one particular family. How could you tell if these goods were complements, substitutes, or unrelated goods?
a. If the price of black beans rose and the consumption of rice remained the same, they would be substitutes.
b. If the price of black beans rose and the consumption of rice increased, they would be substitutes.
c. If the price of black beans rose and the consumption of rice decreased, they would be substitutes.
d. If the price of black beans rose and the consumption of both goods remained the same, they would be complements.
B
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Betsy's utility depending from her consumption of coffee is shown in the table above. If the price of a cup of coffee is $2, Betsy's marginal utility per dollar from the 2nd cup of coffee per day is
A) 15. B) 40. C) 20. D) 32.5.
According to classical economists, the increase in unemployment in recessions is caused by
A) slack aggregate demand. B) the failure of wages to adjust to restore equilibrium in the labor market. C) the power of labor unions, which prevent firms from cutting wages. D) a mismatch of workers and jobs.