If a 10 percent increase in the income of the consumers of Good X leads to a 7 percent decrease in the quantity demanded of Good X, we can conclude that:
a. Good X is a normal good
b. Good X is a luxury good.
c. Good X is an inferior good.
d. Good X is a necessity good.
c
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Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If 10,000 units of iced tea are sold
A) the marginal benefit of each of the 10,000 units of iced tea equals $3. B) marginal benefit is less than marginal cost. C) the deadweight loss is equal to economic surplus. D) producer surplus equals consumer surplus.
In the market for cell phones, which of the following events increases the supply of cell phones?
A. New technology lowers the cost of making a cell phone B. Rise in the price of an e-book reader (a substitute in production) C. An increase in people's incomes D. A rise in the wage rate paid to electronics workers
The laws of contracts and their enforceability in court determine the range of transactions that we will find it worthwhile to undertake
Indicate whether the statement is true or false
If inflation is much higher than originally anticipated, ________ are made better off and ________ are made worse off
a. banks that had made fixed interest rate loans; people that had borrowed fixed interest rate loans. b. people that had borrowed fixed interest rate loans; banks that had made fixed interest rate loans. c. retired people living on a fixed income; people that had borrowed fixed interest rate loans. d. people that had deposited their savings at fixed interest; banks that had taken deposits at fixed interest.