Archie wants to buy a steak for dinner. When he goes by the store, he sees that the price of steak has gone up a lot since the previous week. He decides to buy hot dogs instead. The __________ means that even though Archie has the same amount of money he did last week, that money won’t buy the same amount of steak today.
a. income effect
b. substitution effect
c. inflationary effect
d. deflationary effect
a. income effect
The income effect is when a higher price reduces the buying power of income (even though actual income has not changed), which leads to buying less of the good (when the good is normal).
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At a price of P0 in the above figure, which of the following statements is FALSE?
A) Quantity demanded equals quantity supplied. B) There is an equilibrium in the market. C) P0 is the market clearing price. D) There is a surplus equal to Q0.
A realtor in the real estate market is an example of
A) an end user in a shared-input market. B) a platform in a shared-input market. C) a platform in a matchmaking market. D) an end user in a matchmaking market.
Using specialized equipment to produce simultaneously a number of similar items
a. leads to economies of scale. b. is the goal of deregulation. c. can only happen in a high technology nation. d. is called economies of scope.
Betty and Wilma are the only two cashiers employed at a retail store. Each of them works the same 40 hours per week. By manually entering the price of each product purchased into the cash register, Betty can check out 20 customers and Wilma can check out 30 customers per hour. The store owner replaces the old cash registers with new ones that automatically scan product prices into the register. With the new cash registers, Betty and Wilma can each check out 60 customers per hour. Their average labor productivity as a team before the new cash registers were introduced was ________ customers per hour and ________ customers per hour after the new machines were installed.
A. 50; 60 B. 25; 60 C. 1,000; 2,400 D. 50; 120