Assume the demand function for good X can be written as Qd = 80 - 3Px + 2Py + 10I, where Px = the price of X, Py = the price of good Y, and I = Consumer income. According to this equation:
A) a rise in the price of Y would cause the demand for X to decrease.
B) X and Y are complements
C) X is an inferior good.
D) X and Y are substitutes.
D
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Increases in the minimum wage are intended to raise the incomes of low-income workers. Many economists favor a different policy to achieve this goal, a policy that avoids the deadweight losses that result from the minimum wage. What is this policy?
A) the Alternative Minimum Tax B) the earned income tax credit C) distribution of food stamps to low-income consumers D) distribution of vouchers that can be used for rent or mortgage payments
Money facilitates trade because
a. it eliminates the need for specialization b. it prevents people from taking advantage of each other c. it serves as a medium of exchange d. division of labor allows money to be produced at a lower cost e. people do not benefit from barter unless money is used
Suppose the mean earnings of two groups differ. Which of the following would be the logical conclusion?
a. The group with the lowest earnings must be the victim of employment discrimination. b. The group with the lowest earnings must be less productive. c. The group with the highest earnings is more highly motivated and materialistic. d. Without consideration of preferences and productivity factors, differences in unadjusted mean earnings do not necessarily reflect employment discrimination.
Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist.
This monopolist maximizes its profit by producing ________ textbooks per week and charging a price of ________ per textbook.
A. 150; $40 B. 150; $20 C. 100; $40 D. 100; $80