Joe consumes 10 units of food and 12 units of clothing. Since food is an inferior good, a gift to Joe of a $12 gift certificate at a clothing store will:
A. definitely make Joe worse off than a gift of $12 in cash.
B. definitely make Joe better off than a gift of $12 in cash.
C. induce Joe to eat more than 10 units of food.
D. None of the statements is correct.
Answer: D
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Fred has always been known as "the rich kid." Strictly speaking, this must mean that ________
A) Fred has a lot of cash B) Fred's income is quite high C) Fred won the lottery before he was legally eligible D) Fred has a flashy wardrobe E) Fred has a lot of wealth
If fixed cost rises,
A. the profit-maximizing level of output would decrease. B. the profit-maximizing level of output would not change. C. marginal cost rises. D. variable cost falls.
Which of the following happens when oligopolistic firms decide to cooperate? a. Barriers to entry are relaxed. b. Net social welfare increases. c. The same level is produced as in a monopoly
d. Consumer surplus is the same as it would be in a competitive market.
In the presence of long lags, attempts at stabilizing the economy may actually destabilize it.
Answer the following statement true (T) or false (F)