In the above figure, Brendan originally consumes at point A. If his income rises and both compact discs and haircuts are normal goods then he could begin consuming at point
A) B, C, or D.
B) B.
C) C.
D) D.
C
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Suppose that IS and LM intersect at full-employment output. A leftward shift of IS will be followed by a __________ price level that shifts LM to the __________ in a return to full employment
A) rising; right B) rising; left C) falling; right D) falling; left
The poverty gap is
A. the percentage of people in households with income under the poverty line. B. that level of income sufficient to provide a family with a minimally adequate standard of living. C. the amount of money the poor must earn from work. D. the total amount of money that would have to be transferred to households in poverty to lift them out of poverty.
Recall the Application about weather-linked crop insurance to answer the following question(s).According to the Application, how does weather-linked crop insurance increase agricultural yields?
A. It makes the farmers more willing to take risks by providing insurance payouts to cover weather-related revenue loss. B. It makes the farmers more willing to take risks by providing additional insurance payouts when farmers receive bumper crops. C. It makes the farmers less willing to take risks by providing insurance payouts to cover weather-related revenue loss. D. It makes the farmers employees of the government.
Which of the following would result in a higher absolute value of the price elasticity of demand for a product?
A) A wide variety of substitutes are available for the good. B) The time period under consideration is short. C) The good is a necessity. D) The expenditure on the good is small relative to one's budget.