In economic terminology, a normal good is a good
A. for which demand increases when price increases.
B. for which demand increases when income increases.
C. that is liked only by normal people.
D. on which a monetary value cannot be placed.
Answer: B
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Inventory investment consists of
A) construction expenditures, raw materials, and inventories of finished goods. B) goods in process, raw materials, and purchases of office machinery. C) raw materials, goods in process, and construction expenditures. D) inventories of finished goods, goods in process, and raw materials.
Suppose the demand function for a good is expressed as Q = 100 - 4p. If the good currently sells for $10, then the point price elasticity of demand equals
A) -1.5. B) -0.67. C) -4. D) -2.5.
The price elasticity of demand for a rental home in Luxury Resorts in the summer is 1.40 and is 2.60 in the spring. If Luxury Resorts faces a constant marginal cost of $600 per home rental, what is the profit-maximizing off-peak load price to charge in the spring?
A) $975 B) $2,100 C) $575 D) $850
The classicals, applying Say's law, believed that all our income would be _______, all our production would be _______ and all our savings would be ________.
Fill in the blank(s) with the appropriate word(s).