For which product is the income elasticity of demand most likely to be negative?
A. Bread
B. Used clothing
C. Computer software
D. Golf balls
Answer: B
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For a monopolist, marginal revenue is
a. equal to price b. greater than price c. less than price d. represented by a horizontal curve e. equal to average revenue
A perfectly competitive firm should hire additional units of labor in a competitive labor market if
a. marginal revenue is less than marginal cost b. the marginal revenue product exceeds the wage rate c. total revenue exceeds total cost d. the marginal product of labor exceeds the wage rate e. the marginal product of labor is less than the wage rate
If import restrictions prohibit foreigners from selling various goods and services in the U.S. market,
A) the U.S. will be able to export more goods abroad. B) the U.S. will be able to produce more output than would be otherwise the case. C) foreigners will have fewer U.S. dollars with which to buy U.S. goods and services. D) the domestic producers in the protected industries will supply goods to U.S. consumers at lower prices than would be otherwise the case.
Because models are used to explain economic behavior
A) the assumptions must be complex while the models themselves are simple. B) models must be complex. C) models must be simple. D) models can be either simple or complex so long as it explains economic behavior.