If demand for personal computers increases as a result of an increase in income,
a. personal computers must be a normal good
b. personal computers must be an inferior good
c. personal computers must be a complement
d. the substitutes for personal computers must be inferior goods
e. the substitution effect is larger than the income effect
A
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Which of the following variables can be used to measure labor productivity?
A) real GDP B) number of labor hours C) number of workers D) all of the above
Which of the following is most likely to create diseconomies of scale?
A) concentration of production in a small number of very large plants. B) the use of automation devices. C) technological advance. D) division of labor.
Which of the following situations could generate a shortage?
A) Demand for a good increases, resulting in a new higher market clearing price. B) Demand for a good decreases, resulting in a new lower market clearing price. C) Demand for a good increases, but the price is not permitted to rise. D) Demand for a good decreases, but the price is not permitted to fall.
When the government levies a $100 million tax on people's income and puts the $100 million back into the economy in the form of a spending program, such as new interstate highway construction, the:
a. tax, then, generates a $100 million decline in real GDP. b. level of real GDP expands by $100 million. c. effect on real GDP is uncertain. d. tax multiplier overpowers the income multiplier, triggering a rollback in real GDP.