Which of the following statements is true for a normal good?
(a) An increase in income will result in an increase in supply, ceteris paribus.
(b) An increase in income will result in an increase in demand, ceteris paribus.
(c) An increase in income will result in an decrease in demand, ceteris paribus
(d) An increase in income will have no effect on demand, ceteris paribus.
Ans: (b) An increase in income will result in an increase in demand, ceteris paribus.
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The figure above shows
A) a positive relationship. B) a direct relationship. C) a negative relationship. D) no relationship between the variables.
Suppose that a regulatory agency has imposed marginal cost pricing on a natural monopolist. We expect that
A) the firm will earn only a normal profit. B) the firm's average total cost of production is rising over the relevant range of production. C) the firm will earn economic profits. D) the firm will eventually go out of business.
Monetary policy refers to the actions the Federal Reserve takes to manage
a. the money supply and income tax rates to pursue its economic objectives. b. the money supply and interest rates to pursue its economic objectives c. income tax rates and interest rates to pursue its economic objectives d. government spending and income tax rates to pursue its economic objectives
Refer to the given data. In maximizing its profit, this firm will employ:
A. 2 units of labor.
B. 3 units of labor.
C. 4 units of labor.
D. 5 units of labor.