If the income elasticity for chocolate chip cookies is 1.84, then chocolate chip cookies are
A) a normal good and income inelastic.
B) a normal good and income elastic.
C) an inferior good and income inelastic.
D) an inferior good and income elastic.
B
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Most individual's income peaks when they are about
A) 30. B) 40. C) 50. D) 60.
Assume a firm has the following cost and revenue characteristics at its current level of output: price=$10.00 . average variable cost=$8.00 and average fixed cost =$4.00 . This firm is
a. incurring a loss of $2.00 per unit and should shut down. b. realizing only a normal profit. c. realizing an economic profit of $2.00 per unit. d. incurring a loss per unit of $2.00 . but should continue to operate in the short run.
The reason the short-run macro model suggests that the economy can operate either above or below its potential while in the long-run classical model the economy operates automatically at full employment is that
a. the short-run macro model is flawed and inaccurate b. the classical model is flawed and inaccurate c. the two models measure completely different aspects of the economy d. in the short run, spending affects output, but not in the long run e. in the short run the role of government in helping the economy return to equilibrium is not considered
From an economic perspective, when a consumer decides to buy more life insurance, the consumer has most likely concluded that the:
A. Marginal cost of more insurance coverage is negative B. Marginal benefit of more insurance coverage is greater than zero C. Marginal benefit of more insurance coverage is greater than the marginal cost D. Marginal cost of more insurance coverage is equal to the payment for the extra coverage