If the income elasticity of demand for a good is negative, this means that:
a. only the poor will buy the good.
b. as incomes fall, less will be spent on the good.
c. as incomes rise, the demand for the good will fall.
d. the good does not obey the law of demand.
c
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Government expenditures on goods and services include
i. the New York City Library's purchase of new books. ii. Washington D.C.'s purchase of gas for its city buses. iii. California's payment of wages to prison guards. A) i and ii B) i and iii C) i, ii and iii D) i only E) ii and iii
When the market for gasoline in Motorland is in equilibrium, the deadweight loss is
A) $37,500 per month. B) $150,000 per month. C) $75,000 per month. D) zero.
How does a reduction in the price level affect the position of the C + I + G + X curve and in turn the equilibrium level of real GDP?
A. The C + I + G + X curve shifts up, thereby reducing the equilibrium level of real GDP. B. The C + I + G + X curve shifts down, thereby increasing the equilibrium level of real GDP. C. The C + I + G + X curve shifts up, thereby increasing the equilibrium level of real GDP. D. The C + I + G + X curve shifts down, thereby reducing the equilibrium level of real GDP.
A firm is most likely to experience economies of scale if its start-up costs are high and its marginal cost is ________.
A. low B. decreasing C. increasing D. high