The income effect is the concept that changes in consumption of a good result from changes in government spending
a. True
b. False
Indicate whether the statement is true or false
False
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Assuming supply is held constant, an increase in demand for a product will cause an increase in the equilibrium price and the amount bought and sold
a. True b. False Indicate whether the statement is true or false
Assume the standard trade model with two countries (Alpha and Beta), two goods (food and drink), and two factors of production (land and labor). Further assume that Alpha is relatively labor-abundant and drink is relatively labor-intensive. If the countries engage in free trade, the price of food will
A. fall in Alpha and rise in Beta. B. fall in both countries. C. rise in both countries. D. rise in Alpha and fall in Beta.
Suppose John goes to a wedding reception where free drinks are served. He will drink until the marginal utility of an additional drink is _____.
a. ?infinite b. ?less than zero c. ?greater than one d. ?one e. ?zero
In 1979, the price of gasoline was $1.389 per gallon and the CPI was 72.6. In 2003, the price of gasoline was $1.589 per gallon and the CPI was 182.9. Find the real price of gasoline in 1979 and 2003 in terms of base period dollars
What will be an ideal response?