For inferior goods, when incomes rise the demand for these goods falls.
Answer the following statement true (T) or false (F)
True
Inferior goods, like used cars or bus passes, are not as desirable when consumers earn more income.
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The above figure shows the payoff matrix for two firms. A chemical firm must choose between a low level of production which yields one ton of pollution into a nearby lake and a high level of production which yields two tons of pollution into the
nearby lake. A private beach on the lake must decide whether to operate or not. Increased pollution reduces the number of people who wish to visit the beach. If the chemical firm owns the lake, and the beach owner must pay $10 to keep the chemical firm at just one ton of pollution, then A) the beach shuts down and the chemical firm produces one ton of pollution. B) the beach shuts down and the chemical firm produces two tons of pollution. C) the beach operates and the chemical firm produces one ton of pollution. D) the beach operates and the chemical firm produces two tons of pollution.
Increase in money supply leads to a …………………in the interest rate for a given level of output, real money supply ………………
A. Increases, decrease B. Decrease, increase C. Increase, increase D. Decrease, decrease
Curt pays a $200 annual fee at a fitness center rather than paying the $2 charge that it would cost if he paid by the visit. He intends to go 100 times in the year. He claims that the fee will act as a commitment device to help him follow his wish to exercise regularly and the per visit fee would not act as a commitment device. His friend tells him that the cost is $100 either way so his reasoning is false. Do you agree that the annual fee can act as a commitment device for Curt and the per visit fee would not? Explain your answer. Assume a zero interest rate so the timing of payments is not affected by foregone interest.
What will be an ideal response?
Which of the following best denotes the reason for the existence of substantial black markets?
A. a market-oriented economy B. a command economy C. government laws and rules D. the microeconomy