An economist estimates that on average, for every 1 percent increase in income, the quantity of European cars demanded increases by 1.93 percent. From this information one can conclude that European cars are:
A. a luxury.
B. a negative good.
C. an inferior good.
D. a necessity.
Answer: A
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Assuming the market is in equilibrium in the graph shown with demand D and supply S1, total surplus is:
A. greater than total surplus when market is in equilibrium at D and S2.
B. less than total surplus when market is in equilibrium at D and S2.
C. the same as total surplus when market is in equilibrium at D and S2.
D. zero.
When deciding whether to hire an additional worker, firms need only consider how the additional worker would affect
a. costs. b. revenues. c. output. d. profit.
The price of one currency in terms of another is the
A) price of gold. B) price of a SDR. C) foreign exchange rate. D) price of foreign stock.
Which of the following will not occur as the result of a decrease in net taxes?
A) decreased household saving B) decreased government saving C) a shift to the left of the supply curve for loanable funds D) all of the above