Selling baked goods out of your home or apartment is illegal in Wisconsin and New Jersey, but in recent years, California, Minnesota, and Texas have repealed their laws banning the sale of home-baked goods. The repeal of these laws will cause the
revenues of commercial bakeries in these three states to ________ and their profits to ________.
A) rise; increase
B) rise; decrease
C) fall; decrease
D) fall; increase
Answer: C
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The permanent income hypothesis highlights the phenomenon of ________
A) the intertemporal budget constraint B) a binding borrowing constraint C) autonomous consumption D) consumption smoothing
At a boundary choice:
A. the consumer purchases at least some of every good. B. the consumer purchases no goods. C. the consumer does not spend all of her income. D. the consumer purchases some of at least one good but none of at least one other good.
Suppose that differences in skills explain part of the difference in wages by race. Wage differences arising from skill differences:
A. may result from past discrimination in access to education. B. are not attributable to present or past discrimination. C. will disappear when labor markets are in equilibrium. D. are always classified as racial discrimination.
Efficient production can be carried out anywhere on or beyond the production possibilities frontier.
Answer the following statement true (T) or false (F)