Figure 5-15
Hal initially consumes the combination marked as A in Figure 5-15. After his income increases, Hal consumes combination B. We can conclude that Hal views
A. X as an inferior good and Y as a noninferior good.
B. X as a noninferior good and Y as an inferior good.
C. both X and Y as noninferior goods.
D. both X and Y as inferior goods.
Answer: A
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Which of the following would increase the price of a firm's stock?
a. an decrease in demand for the firm's products b. the emergence of a promising new competitor c. the approval of a new patent for the firm d. an increase in the interest rate e. the threat a major lawsuit against the firm
The fundamental economic questions that every economic system must answer are:
A) what, how, and for whom. B) what, why, and for whom. C) when, why, and for whom. D) how, when, and how much.
Which of the following statements explains the vicious circle of poverty?
A. By investing in education and infrastructure at the same time, the country can overcome the problems of poverty. B. Poverty arises out of the lack of investment, but countries cannot invest because they are poor. C. A nation can shift its production possibilities curve inward by shifting more resources into the production of capital goods. D. A nation can shift its production possibilities curve outward by shifting more resources into the production of consumer goods.
Which statement is true?
A. In the market period, industry supply is either perfectly elastic or very elastic. B. In the short run, an increase in demand can lead to an increase in a firm's output. C. In the market period, an increase in demand will lead to an increase in the firm's output. D. Supply is less elastic in the long run than in the short run.