The addition of gasoline pumps at a grocery store is a good example of a network externality
Indicate whether the statement is true or false
TRUE
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If a 5 percent decrease in income leads to a 15 percent decrease in the demand for a good, the income elasticity of demand equals
A) -1/3 and the good is an inferior good. B) 1/3 and demand for the good is income elastic. C) 3 and the good is a normal good. D) -3 and the demand for the good is income inelastic. E) 3 and the good is an inferior good.
Why has there been an increase in the inequality of income?
a. The demand for skilled workers has declined. b. The demand for skilled workers has remained constant and the demand for unskilled workers has declined. c. The government policies went against the unskilled workers. d. The demand for skilled workers has increased and the demand for unskilled workers has not kept pace. e. The demand for unskilled workers has increased as they could be hired for lower wages.
As a result of firms leaving an industry, we would expect that: a. economic profits are positive
b. as a result, economic losses are falling. c. as a result, economic losses are rising. d. both (a) and (b) are true.
In setting an obligatory control on a polluting industry, the government
a. places a tax on the pollution b. creates pollution permits which could be sold on the open market c. creates private property rights for air d. establishes a limit on the amount of pollution a producer is permitted to emit e. offers a subsidy to the polluting firm