In college you could barely afford to dine in restaurants. Now you earn $80,000 a year and dine out at least three times per week. We can safely conclude that you consider restaurant meals to be a(n)
A. inferior good.
B. substitute good.
C. normal good.
D. complementary good.
Answer: C
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Donald produces nails at a cost of $200 per ton. If he sells the nails for $350 per ton, his producer surplus per ton is
a. $150. b. $200. c. $350. d. $550.
Saving represents
A) a source of funds for business investment. B) a normal part of the circular flow of income and output. C) an injection to the circular flow of income and output. D) a counter-example to Say's law that the classical economists never considered.
The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. As the price of snacks rises, the price for juice
A) stays the same. B) increases. C) decreases D) might change, but there is not enough information to determine.
An expansionary gap in the short-run results in: a. lower resource prices in the long run. b. unemployment in the long run
c. a recessionary gap in the long run. d. cost-push inflation in the long run. e. demand-pull inflation in the long run.