What are the main characteristics of high-income and low-income households?
What will be an ideal response?
There are four major characteristics that influence the amount of income earned by an individual: i) Education: The more education attained by a person the higher the human capital that person has, and the more income that person enjoys; ii) Type of household: Married couples earn more, on average, than single people living alone, especially females living alone; iii) The age of householder: The oldest and youngest households have lower incomes than middle age households; and iv) Race: Individuals living in households headed by an Asian person have the highest incomes, followed by white households, Hispanic households, and then black households.
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A country can gain by importing a good from abroad even if that good can be produced more efficiently at home. Is this statement true?
What will be an ideal response?
Defenders of advertising argue that it is not rational for profit-maximizing firms to spend money on advertising for products that have
a. superior quality. b. inferior or mediocre quality. c. low prices. d. limited availability.
Which two types of goods are rival in consumption?
If the government increases expenditures on goods and services and increases taxation by the same amount, which of the following will occur?
a) aggregate demand will be unchanged b) aggregate demand will increase c) interest rates will decrease d) the money supply will decrease e) the money supply will increase