A normal good is one for which
A) demand increases as income increases.
B) demand increases as income decreases.
C) the demand curve is horizontal.
D) demand increases as the price of a substitute increases.
A
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The divergence between money costs and opportunity costs is the smallest in which of the following situations?
A. China hires millions of otherwise unemployable workers to build roads using picks and shovels. B. Wilhelm, a petroleum engineer, is drafted, and his army salary is $1,000 per month. C. Colleen quits her job to stay at home and raise her children. D. A university employs a private contractor to build a field house on land it purchased at full market value from a local farmer.
Explain what a "perfectly contestable" market means. Give an example of a perfectly contestable market. Explain why the outcome in a perfectly contestable market is that firms produce efficiently
What will be an ideal response?
Assume there is a decrease in the market demand for a good sold by price-taking firms that are initially producing the profit-maximizing level of output. For the individual firm, this would result in:
A) a decrease in both price and the profit-maximizing quantity of output. B) a decrease in price and increase in the profit-maximizing quantity of output. C) an increase in both price and the profit-maximizing quantity of output. D) an increase in price and decrease in the profit-maximizing quantity of output.
A possible budget reform involves: a. a quadrennial budget
b. breaking down the budget into increasingly small budget lines. c. appointing agency heads with different priorities than those of elected representatives. d. to simplify the budget document by concentrating only on major groupings and eliminating line items. e. to eliminate the operating budget.