If the Engel curve for a good is upward sloping, the demand curve for that good must be downward sloping
What will be an ideal response?
True. If the Engel curve is upward sloping, the good is normal. As a result, the income effect will reinforce the substitution effect and guarantee a downward-sloping demand curve.
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The short run is a period of time
a. equal to or less than six months b. during which all resources may be varied c. during which all resources are fixed d. during which at least one resource is fixed e. during which at least one resource may be varied
For a country producing two goods, the opportunity cost of one good will be the inverse of the opportunity cost of the other good
a. True b. False Indicate whether the statement is true or false
After the price floor is instituted, the legal minimum price that can be charged by suppliers is $70 per barrel. The maximum price that a few of the consumers are still willing to pay is $100 per barrel of gosum berries. With the price floor at $70 per barrel, consumers buy 300 barrels of gosum berries per month. How much consumer surplus is created with the price floor?
½ (300 x 30) = $4,500
In the traditional Keynesian model, if the government raises taxes, then
A. both consumption and real Gross Domestic Product (GDP) will increase. B. both consumption and real Gross Domestic Product (GDP) will decrease. C. consumption will increase but Gross Domestic Product (GDP) will decrease. D. consumption will decrease but Gross Domestic Product (GDP) will increase.