The table above gives the demand schedule for snow peas. The demand curve for snow peas is a straight line and so the elasticity of demand is
A) 1 at all prices.
B) the same at all prices but not 1.
C) higher at higher prices.
D) lower at higher prices.
C
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For the purpose of GDP accounting, consumption expenditures include
A) only durable goods. B) only nondurable goods. C) both nondurable goods and services. D) durable goods, nondurable goods, and services.
You have been hired by an attorney to perform an economic analysis of lost wages in a wrongful death suit. The case involves an insurance agent, John Doe, who was killed in an auto accident a few days after his 59th birthday. Mr
Doe could have expected to earn $75,000 this year. Data suggest that the income of insurance agents has risen an average of 6% over the past 20 years. Mr. Doe's expected retirement age was 65, i.e., on his 65th birthday. Available data provide the mortality rates given below for individuals of Mr. Doe's sex and occupation at various ages. Ten percent appears to be the appropriate discount rate. Age Mortality Rate 59 0.06 60 0.075 61 0.09 62 0.10 63 0.12 64 0.15 65 0.16 a. Calculate the present discounted value of Mr. Doe's expected earnings stream. (For simplicity, assume he receives all of his earnings for the preceding year on his birthday.) b. The attorney has asked your advice regarding a minimum figure that should be accepted as an out-of-court settlement. What guidance can you give the attorney? Would additional information allow you to give the attorney a more precise estimate of the figure that should be accepted? Give an example of how more information would help. c. You must be prepared for cross-examination by the defendant's attorney. Where would you expect the opposing attorney to attack your testimony?
Assume a price floor is imposed at the current equilibrium price in the market for lettuce. If the demand for lettuce then increases: a. a surplus of lettuce will be created
b. a shortage of lettuce will be created. c. the quantity of lettuce traded remains the same. d. the quantity of lettuce supplied will increase.
According to the benefits principle, it is fair for people to pay taxes based on the benefits they receive from the government
a. True b. False Indicate whether the statement is true or false