When the price of one good changes, while the prices of all others stay the same:
A. the change in relative prices is reflected in a change in the slope of the budget constraint.
B. the change in relative prices can be thought of as a change in the opportunity costs of each good.
C. the change in relative prices is reflected in a change in the marginal utility per dollar spent on each good.
D. All of these statements are true.
D. All of these statements are true.
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According to classical growth theory, people earn only a subsistence real income because of growth in
A) technology. B) employment. C) population. D) labor productivity. E) capital.
Assume that a multinational company produces components in country A and ships them to a subsidiary in country B. In order to increase its profits
A) the company should charge a high transfer price for the components if income taxes in country B are higher than in country A. B) the company should charge a low transfer price for the components if income taxes in country B are higher than in country A. C) the company should charge a high transfer price for the components if income taxes in country A are higher than in country B. D) None of the above
By polling people, we can calculate the demand for public goods and have the market provide them. But we don't. Instead, we allow the government to pay for and provide those goods because it
a. knows better than individuals what public goods are desirable b. avoids "special interests" interference in the market c. can avoid all negative and positive externalities d. can tax people to finance the production of public goods and thereby prevent freeriders e. can prevent market failure
When demand is inelastic, a decrease in price will cause
a. an increase in total revenue. b. a decrease in total revenue. c. no change in total revenue but an increase in quantity demanded. d. no change in total revenue but a decrease in quantity demanded.