One problem with hiring the services of a neighbor's wife for household cleaning is that Gross National Product does not change
Indicate whether the statement is true or false
F
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One characteristic of a Giffen good is that it
A) is a luxury good. B) is an inferior good. C) has an upward-sloping Engel curve. D) All of the above.
Before an uneven rise in prices Allan consumed five bread and six juice. After the price increase and with an increased welfare payment from the government Allan consumes four bread and seven juice
Does the government payment represent a true cost-of-living adjustment? A) Yes, if the two consumption bundles lie on the same indifference curve. B) Yes, if the second bundle yields more utility than the first. C) No, the first bundle is clearly preferred. D) Not enough information.
The "invisible hand" using Adam Smith's terminology refers to
a. government control of the market. b. market forces working through the price mechanism. c. the money supply that serves to keep the economy working smoothly. d. the role of innovation in maintaining a steady rate of growth. e. "behind-the-scenes" policy making to influence how markets allocate scarce resources.
The Shoe Emporium reduces the price of its shoes by 50% and finds that the quantity demanded for its shoes increases more than 80%. The demand for shoes from The Shoe Emporium appears to be: a. inelastic
b. elastic. c. unit elastic. d. unit inelastic.