If demand for Tesla automobiles rises in an area where incomes have increased, this tells us that a Tesla is
A) a normal good.
B) an inferior good.
C) a complementary good.
D) a substitute good.
Answer: A
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The return to entrepreneurship is known as
A) economic profit. B) normal profit. C) opportunity revenue. D) normal revenue. E) explicit profit.
Other things equal, a positive supply shock would
a. Lower the price level b. Increase real output c. Shift AD right d. Do a. and b. but not c.
"Gasoline purchases were up 10% last week, even though gasoline prices were 6 cents higher than the week before! You see, the law of demand does not hold for gasoline!" What is being misunderstood in the above statement?
A) Nothing at all. B) It implies the demand curve for gasoline is vertical. C) It fails to recognize that the demand curve has shifted to the right. D) It fails to hold constant all the other factors that influence demand.
Self-selection
A. increases the turnover costs of a firm. B. increases the compensating wage differential. C. reduces the compensating wage differential. D. increases the number of qualified applicants for a job.