1. Mary buys three goods: A, B, and C. When her income rises she buys less of good B and more of goods A and C. When the price of good C rises she buys more of good A and less of good B. Which goods are normal? a. A and C b. B c. all of them d. C and B 2. The price of a good has gone down. What would be a good explanation of this? a. the cost of a key input used to produce the good has declined. b. there are now fewer firms selling the good. c. the price of a substitute good has gone up. d. there was an excess demand for the good in the market. 3.Under what circumstances is the production possibilities frontier a straight line? a. when there are constant opportunity costs of production b. the production possibilities frontier is always a straight line c. the production possibilities frontier is never a straight line d. when there are increasing opportunity costs of production
1. Mary buys three goods: A, B, and C. When her income rises she buys less of good B and more of goods A and C. When the
a. A and C
b. B
c. all of them
d. C and B
2. The price of a good has gone down. What would be a good explanation of this?
a. the cost of a key input used to produce the good has declined.
b. there are now fewer firms selling the good.
c. the price of a substitute good has gone up.
d. there was an excess demand for the good in the market.
3.Under what circumstances is the
a. when there are constant
b. the production possibilities frontier is always a straight line
c. the production possibilities frontier is never a straight line
d. when there are increasing opportunity costs of production
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