A Giffen good
A) is always the same as an inferior good.
B) is the special subset of inferior goods in which the substitution effect dominates the income effect.
C) is the special subset of inferior goods in which the income effect dominates the substitution effect.
D) must have a downward sloping demand curve.
C
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In monopolistic competition, barriers to entry give the firms the power to set their price
Indicate whether the statement is true or false
Which of the following is NOT an example of ways in which microeconomic analysis can help Toyota Motor Corporation in its corporate decision making?
A.Forecasting demand for new automobiles B. Determining how many automobiles to produce in order to maximize profits C. Forecasting the effect of an oil price increase on demand for hybrid autos D. Predicting how competitors will react to the firm's pricing strategy E. Forecasting the effect of Toyota's hiring patterns on the U.S. unemployment rate
Which of the following statements about isoquant maps is true?
A. They always have positive slope. B. They cannot illustrate economies of scale unless some numerical values are attached. C. They always have negative slope. D. They can illustrate diminishing returns to production only when they have numerical values attached.
Workers in country A receive an increase in wages of 10 percent at the same time the inflation rate in country A is 8 percent. Workers in country B receive an increase in wages of 3 percent and the inflation rate in country B is 1 percent. In which country are workers better off?
A. Country A because their real wages rise by 18 percent. B. Country A because their real wages rise by 10 percent. C. Country B because the inflation rate is lower. D. Neither country because the increase in real wages is the same.