What is the difference between a normal good and an inferior good? Give an example of each
What will be an ideal response?
A good is a normal good if an increase in incomes leads to an increase in demand for a good. Most goods are normal goods. An example of a normal good is new clothes. A good is an inferior good if an increase in income leads to a decrease in demand for the good. Second-hand clothing that can be purchased at thrift stores is an inferior good.
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Information exchanges operated by sellers are illegal
Indicate whether the statement is true or false
Which of the following statements about markets is true?
a. Markets reduce the opportunity costs of making exchanges. b. Markets expand the range of buyers and sellers available as counterparties. c. Markets increase the transaction costs of making exchanges. d. Markets increase the costs of information.
Inflation is a serious problem because inflation causes real wages to decline
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT a factor of production?
A.) A toll-bridge across a lake. B.) The money hidden in an old basement. C.) A wrecking ball used to tear down old buildings. D.) The CEO of a large corporation.