Suppose the demand function for a consumer is given by 
a. What is the own-price elasticity of demand for x?
b What is the cross-price elasticity of demand for x?
c. What happens to spending on x as the price of x increases?
d. What is the income elasticity of demand for x? What does this tell you about what kind of good x must be?
What will be an ideal response?
b.
c. Since the price elasticity is -2 -- i.e. since demand is relatively price elastic, spending will fall as price increases.
d. Since income does not appear in the demand function, the income elasticity of demand is zero. This implies that the good x is quasilinear.
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In macroeconomics, equilibrium is defined as the point at which:
a. the economy attains the highest level of GDP. b. there is no unemployment in the economy. c. people's plans match the reality. d. there is high inflation and unemployment in the economy. e. there is no inflation in the economy.
Which of the following states had the highest incidence of union membership as a percent of all wage and salary workers in 2012?
a. New York, Hawaii, and Alaska b. South Carolina, North Carolina, and Mississippi c. Arkansas, North Carolina, and Texas d. California, Florida, and Georgia
The marginal productivity theory of income distribution holds that ______.
a. the most productive employees increase income by maximizing the substitution effect b. owners of the means of production receive higher payments than workers or land owners c. labor, land, and capital owners are all paid for the value of their contribution to output d. union workers will receive higher wages than nonunion workers for comparable labor
Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the:
A. diminishing returns to capital. B. importance of average labor productivity. C. limits of economic growth. D. power of compound interest.