Suppose that the income elasticity of demand for good X is positive but less than 1. Other things being equal, which of the following statements is incorrect?
A. Good X is a normal good.
B. The quantity demanded of good X decreases as a consumer's income declines.
C. A consumer buys more X as income rises, but the share of income spent on good X falls.
D. A consumer buys more X as income rises and the share of income spent on good X also rises.
Answer: D
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If unplanned investment is negative, firms will ________ production and output will ________
A) cut; rise B) cut; fall C) increase; rise D) increase; fall
The main problem of a negative income tax system is that it
a. guarantees every household a minimum level of income b. causes excessive government meddling in people's lives c. is too complex to administer fairly d. lowers peoples' work incentives e. ignores the culture of poverty that produces less income
Marginal cost is equal to average variable cost
A) when average variable cost is at its minimum value. B) when marginal cost is at its minimum value. C) when average variable cost is getting smaller. D) when average variable cost is getting larger.
Refer to the information provided in Figure 9.6 below to answer the question(s) that follow. 
Figure 9.6Refer to Figure 9.6. Assume this firm is in a constant-cost industry. For this firm to be in long-run equilibrium, the firm must be producing
A. q1 units of output. B. q2 units of output. C. q3 units of output. D. an amount that is indeterminate from this information.