As income falls, the demand for normal goods ____ and the demand for inferior goods ____.
A. falls; falls
B. rises; rises
C. falls; rises
D. rises; falls
C. falls; rises
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The formula for calculating the CPI is
A) (Expenditures in the current year × Expenditures in the base year)/100. B) (Expenditures in the base year/Expenditures in the current year). C) (Expenditures in the base year × 100)/(Expenditures in the current year). D) (Expenditures in the current year/Expenditures in the base year) × 100.
The capabilities approach considers:
A. how much human capital improves over time in a society. B. what people can be and how much people can do over time in a society. C. how much human capital one society has relative to another. D. how much total output changes over time in a society.
Which of the following statements is correct?
a. Low prices may not always be in the public interest. b. If prices on scarce resources are set "too low," consumers will receive the "wrong" signals and be encouraged to consume more, thus squandering resources. c. Raising prices on scarce resources is generally politically unpopular. d. All of the above are correct.
Assume the price of Nikes decreases. As a result, consumers increase the quantity of Nikes purchased each year and purchase fewer Reeboks. This is an example of the:
A. substitution effect. B. income effect. C. utility effect. D. consumption effect.