Which of the following statements best describes trade-offs?
a. With a trade-off, it is necessary to give up some of one good to gain more of the other good.
b. Trade-offs are not determined by the relative prices of the goods.
c. A trade-off is always represented by a straight vertical line.
d. A trade-off is always represented by a straight horizontal line.
a. With a trade-off, it is necessary to give up some of one good to gain more of the other good.
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The most widely used measure of income inequality is
A) the Bureau of Labor Statistics' cost-of-living index. B) the Laffer curve. C) the Lorenz curve. D) the Gemini coefficient.
If we wanted to prove that macaroni is an inferior good, we would test the __________ of macaroni and get a __________
a. cross-price elasticity; negative number b. income elasticity; number less than 1 c. income elasticity; positive number d. price elasticity of demand; number greater than negative 1 e. income elasticity; negative number
Suppose the price of banana rises over time and consumers respond by buying fewer bananas. This situation contributes to which bias in the consumer price index?
a. Transportation bias b. Substitution bias c. Quality bias d. Indexing bias
Skyline Chili wants to finance the purchase of new equipment for its restaurants. The firm has limited internal funds, so Skyline likely will
a. demand funds from the financial system by buying bonds. b. demand funds from the financial system by selling bonds. c. supply funds to the financial system by buying bonds. d. supply funds to the financial system by selling bonds.