Since the U.S. is organized as a market economy, the government sector does not play any role in economic activity.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2If the price of pizza increases, the quantity of pizza demanded will fall because some consumers will switch to tacos, hamburgers, or submarine sanwiches. This is called the:
a. income effect
b. the alternative effect
c. the substitution effect
d. the normal good effect
QUESTION 3Restrictions on the types of food additives that breakfast cereal manufacturers can use is an example of a social regulation.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4National economic policies are usually set by the local government in the U.S., making it the focus of economic discussions.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5Reduction in quantity demanded of a good when its price increases because of a consumer's decreased purchasing power is termed as:
a. income effect.
b. substitution effect.
c. utility effect.
d. marginal effect.
QUESTION 6In a natural monopoly, government regulation is often used to ensure more beneficial price and output combinations for consumers in the market than would exist in the absence of regulation.
a. True
b. False
Indicate whether the statement is true or false
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