For which of the following medical services is the income elasticity of demand likely to be the smallest?
a. face-lifts
b. plastic surgery
c. manicures
d. emergency services after a car accident
e. hair transplants
D
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Why did the fall in housing prices lead to bank failures in the U.S. during 2007-2009?
What will be an ideal response?
You receive a $1,000 gift from your grandmother when you graduate from college. Your grandmother withdrew the $1,000 from her checking account and gave you ten $100 bills. You deposit the ten bills into your checking account. Discuss the impact of these transactions on your grandmother's balance sheet, your balance sheet, and the Fed's balance sheet.
What will be an ideal response?
Suppose that you run a house-painting company and currently have 2 workers painting a total of 4 houses per month. If you hire a third worker, 6 houses can be painted per month. If you hire a fourth worker, 9 houses can be painted, and a fifth and sixth worker will increase the number of houses painted to 13 and 15, respectively. Diminishing returns
A. set in when the sixth worker is hired. B. have not yet set in because output is still increasing. C. set in when the fourth worker is hired. D. set in when the fifth worker is hired.
Sharon pays a tax of $4,000 on her income of $40,000, while Brad pays a tax of $1,000 on his income of $20,000. This tax is:
A. regressive. B. progressive. C. proportional. D. a flat tax.