For which of the following would the income effect of a price change be greatest?
a. ballpoint pens
b. air travel to Australia
c. chewing gum
d. haircuts
e. college textbooks
B
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Who receives the goods and services produced in the United States depends largely on
A) how income is distributed. B) what goods and services are produced. C) government redistribution. D) how the goods and services are produced.
Assume Dell and Toshiba computers are substitutes in consumption; if the price of dell computers increases we would expect to see
a. An increase in demand for Toshiba computers b. An decrease in demand for Toshiba computers c. An increase in the quantity of Toshiba computers demanded d. An decrease in the quantity of Toshiba computers demanded
Given the following formula for the Taylor rule:Target federal funds rate = natural rate of interest + current inflation + 1/2(inflation gap) +1/2(output gap) If the inflation rate in the economy were to fall by 2% below the target inflation rate, the target federal funds rate would:
A. Remain at 2.5%. B. Increase by 1.0%. C. Decrease by 3.0%. D. Decrease by 1.0%.
It is assumed that the marginal benefit of air cleanliness falls with the degree of cleanliness since
A) the marginal cost of air cleanliness increases. B) air cleanliness is a public good and not a private good. C) the marginal utility of air cleanliness falls with the degree of cleanliness. D) the generation of pollution should be considered an externality.