Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by a(n)

a. Decrease in the price of potato chips.

b. Decrease in income, assuming that potato chips are a normal good.

c. Announcement by the FDA that potato chips lower cholesterol.

d. Increase in the price of a pretzel.

Answer: b. Decrease in income, assuming that potato chips are a normal good.

Economics

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If the MPC = 0.80, the government purchases multiplier is

A) 2. B) 4. C) 5. D) 8.

Economics

The economic philosophy that favors strict limits on imports and strong support for exports is called

A) zero sum. B) mercantilism. C) comparative advantage. D) absolute advantage.

Economics