Students of microeconomic principles often say they are going to study "tonight," because the only way to pass the exam is to study some every night. When "tonight" comes, some students choose to do something else. Come exam day, these students do not do well on their exam. This observation is an example of how people

If the price of the capital intensive product rises more than does the price of the land intensive product, then

A) the relative price of the capital intensive product will fall to some point between the pretrade relative prices. B) demand will shift away from the capital-intensive product, and its production will decrease. C) demand will shift away from the capital-intensive product, and its production will decrease relative to that of the land intensive product. D) the production of the capital-intensive product will decrease, but by less than production of the land-intensive product. E) the country that exports the capital-intensive good will lose its comparative advantage.

If for any given inflation rate, the federal government lowered taxes, ________

A) it would have a similar qualitative result on output as an increase in government purchases B) it would raise disposable income leading to higher consumption spending C) the aggregate demand curve would shift to the right D) all of the above E) none of the above