The net change in quantity demanded of a good following a price change
a. is equivalent to the substitution effect
b. is equivalent to the income effect
c. must decrease as marginal utility rises
d. is negative only when the income effect is negative
e. reflects both the substitution and income effects
E
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It is not possible to have an absolute advantage in producing a good or service without having a comparative advantage
Indicate whether the statement is true or false
Which of the two bonds in each example would you expect to generally pay the higher interest rate? Explain why
a. a U.S. government bond or a Venezuelan government bond b. a U.S. government bond or a municipal bond with the same term and issued by a creditworthy municipality. c. a 6-month Treasury bill or a 20-year Treasury bond d. a Microsoft bond or a bond issued by a new recording company