If tofu is a normal good, an increase in income will:
a. cause tofu to sell at a lower price.
b. increase the production of tofu.
c. shift the demand curve for tofu to the left.
d. shift the demand curve for tofu to the right.
e. rotate the supply curve in a clockwise manner.
d
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Job rationing occurs if
A) the Lucas wedge is positive. B) the minimum wage is set below the equilibrium wage rate. C) an efficiency wage is set below the equilibrium wage rate. D) the real wage rate is pushed above the equilibrium wage rate. E) a union wage is set below the equilibrium wage rate.
The local mall has a make-your-own sundae shop. They charge customers 35 cents for each fresh fruit topping and 25 cents for each processed topping. Barbara is going to make herself a sundae
The total utility that she receives from each quantity of topping is given by the following table: Fresh Fruit Topping Processed Topping # of Units Total Utility # of Units Total Utility 1 10 1 10 2 18 2 20 3 24 3 10 4 28 4 0 5 30 5 -10 6 28 6 -20 7 24 7 -30 8 18 8 -40 9 10 9 -50 10 -6 10 -60 a. What is the marginal utility of the 6th fresh fruit topping? b. Of the two toppings, which would Barbara purchase first? Explain. c. If Barbara has $1.55 to spend on her sundae, how many fresh fruit toppings and processed toppings will she purchase to maximize utility? d. If money is no object, how many fresh fruit toppings and processed toppings will Barbara purchase to maximize utility? e. Which of the basic assumptions of preferences are violated by preferences shown in the table above?
Holding money to meet unplanned expenditures and emergencies is known as
A) transactions demand. B) precautionary demand. C) asset demand. D) aggregate demand.
Unit root tests
A) use the standard normal distribution since they are based on the t-statistic. B) cannot use the standard normal distribution for statistical inference. As a result the ADF statistic has its own special table of critical values. C) can use the standard normal distribution only when testing that the level variable is stationary, but not the difference variable. D) can use the standard normal distribution but only if HAC standard errors were computed.