When Matt has an income of $2,000 . he consumes 30 units of good A and 50 units of good B. After Matt's income increases to $3,000 . he consumes 25 units of good A and 95 units of good B. Which of the following statements is correct?
a. Both goods A and B are normal goods.
b. Both goods A and B are inferior goods.
c. Good A is a normal good, and good B is an inferior good.
d. Good A is an inferior good, and good B is a normal good.
d
You might also like to view...
Suppose the shift from AD0 to AD1 and from AS0 to AS1 is the result of fiscal policy. Which of the policies below could lead to these shifts?
i. An increase in government expenditure ii. A tax cut iii. A decrease in government expenditure iv. A tax hike A) iv only B) i and ii C) i and iv D) i only E) iii and iv
Which of the following is NOT a disadvantage to inflation targeting?
A) There is a delayed signal about achievement of the target. B) Inflation targets could impose a rigid rule on policymakers. C) There is potential for larger output fluctuations. D) There is a lack of transparency.
At the beginning of the twenty-first century,
(a) many people returned to living in the Northeast and Midwest. (b) the majority of U.S. citizens lived in rural areas. (c) the majority of people resided in the South and West. (d) all of the above
If real GDP in 2016 using 2015 prices is equal to the nominal GDP of 2016, then
A. real GDP in 2016 is larger than real GDP in 2015. B. prices in 2016 are lower than prices in the base year. C. the price level has not changed. D. prices in 2016 are higher than prices in the base year.