When Adam's income increases, he purchases more tickets to Broadway musicals than he did before his income increased. For Adam, Broadway musicals are a(n)
a. normal good.
b. inferior good that is not a Giffen good.
c. Giffen good.
d. optimal good.
a
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The amount by which people will increase or decrease their purchases when prices change
A) is typically greater in the case of luxuries than in the case of necessities. B) is typically less for business firms than for households because business firms can more easily borrow to maintain purchasing patterns. C) is typically less for business firms than for households because business firms must have certain goods to remain in operation. D) tends to be greater over longer periods of time because it takes time to invent and to discover substitutes. E) will be approximately zero unless the demand also changes.
Goods that can be bought in any quantity desired are called
A) divisible goods. B) indivisible goods. C) invisible goods. D) inferior goods.
Assume that the AD curve is held constant and short-run aggregate supply decreases. The result is a(n):
a. increase in both equilibrium real GDP and the price level. b. decrease in equilibrium real GDP and an increase in the price level. c. decrease in both equilibrium real GDP and the price level. d. decrease in equilibrium real GDP, while the price level remains fixed. e. increase in the price level, while equilibrium real GDP remains fixed.
Production functions only apply to advanced economies
Indicate whether the statement is true or false