What would happen in the market for prescription drugs if people begin to view over-the-counter remedies as a good substitute for prescription medications?
A) Prescription medications will become an inferior good.
B) There is an upward movement along the demand curve for prescription medications.
C) There is a downward movement along the demand curve for prescription medications.
D) The demand for prescription medications will decrease.
Answer: D
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To a seller, the cost of a good or service is ________, and the price is ________
A) what must be given up to produce the good or service; what is received for the good or service B) what is received for the good or service; what must be given up to produce the good or service C) the producer surplus the seller receives; the consumer surplus the buyer receives D) the producer surplus the buyer receives; the consumer surplus the seller receives E) None of the above answers is correct.
Inflation is an economic problem because it
A) leads inevitably to unemployment. B) makes prices less useful as signals for resource allocation. C) leads to recession. D) results in rapid increases in the money supply.