Suppose that there is only one small clothing store in the remote village of Green Acres, and until recently the townspeople bought their shirts there. As more people in Green Acres become connected to the Internet, the price elasticity of demand for shirts at the Green Acres store will:
A. increase because the Internet offers more substitutes.
B. remain the same, but the quantity demanded will decrease as more people shop online.
C. decrease because the Internet offers more substitutes.
D. remain the same, but the demand will decrease as more people shop online.
Answer: A
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If the Gini coefficient in the economy decreases from .40 to .32, this indicates
a. greater income equality b. greater income inequality c. the economy is poorer d. the economy is richer e. none of the above can be determined from this information
In colonial days, the wealth holdings among the colonists were
a. approximately equal to their incomes b. unequally distributed among the colonists c. about the same as in 1973 d. approximately zero because there was no appreciable accumulation of assets e. equally distributed among the colonists
When the benefit of another hour of work is greater than the opportunity cost, we would expect the worker to work:
A. another hour. B. exactly that amount. C. an hour less. D. Cannot be determined without more information.
In the 1980s, Japan agreed to limit the quantity of automobiles it would export to the United States. Why did the Japanese government agree to this trade restriction?
A) Japanese automobile producers lobbied for the restrictions in order to increase the price of their exports to the United States. B) The Japanese government wanted to limit sales to the United States in order to make more automobiles available for Japanese consumers. C) The Japanese government feared that the alternative would be a tariff or quota on imports of Japanese automobiles imposed by the U.S. government. D) The Japanese government wanted more automobiles to be available for export to countries other than the United States.