Good A is an inferior good. If the price of good A were to suddenly double, the substitution effect would cause the purchases of good A to increase by
A) more than double.
B) exactly double.
C) less than double.
D) Any of the above are possible.
E) none of the above
E
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Money income is
A) market income plus cash payments from government. B) equal to market income. C) market income plus cash payments from government minus taxes. D) market income minus taxes.
What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 60 dollars in New York and 30 Pounds in London?
A) 1.5 dollars per British pound B) 0.5 dollars per British pound C) 2.5 dollars per British pound D) 3.5 dollars per British pound E) 2 dollars per British pound
Which of the following is not a limitation of the Pareto criteria?
a. Almost any policy change will make at least one person worse off. b. The status quo is lent legitimacy from being the starting point for evaluating social welfare. c. The criteria cannot tell us if a particular policy change will make all participants better off. d. The criteria do not allow for the ranking of all possible states of the world.
This profit-maximizing firm charges a price of
A. OV.
B. OW.
C. OX.
D. Z.