Suppose a 4 percent increase in income results in a 2 percent decrease in the quantity demanded of a good. Calculate the income elasticity of demand for the good and determine what type of good it is
What will be an ideal response?
Income elasticity of demand = -0.5. The good is inferior.
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An international division of labor will have no effect on total world output because resources are limited
Indicate whether the statement is true or false
A cut in the payroll tax will tend to cause, other things the same, ________
A) a change in aggregate demand, with no effect on supply B) a change in both aggregate demand and supply C) a change in aggregate supply, with no effect on demand D) no change in either aggregate demand or supply
Wealth is the same as:
A. assets. B. capital gains. C. net worth. D. savings.
If an externality is created by a single person or firm, and affects only a single person or firm, then
a. it is referred to as a single externality b. the inefficiency caused by that externality may be resolved by those two parties c. the externality takes the form of a side payment d. Pareto efficiency is guaranteed e. fairness dictates that the externality be removed