If the price of gasoline rises sharply and the demand for trucks falls, then the two goods are
A. inferior goods.
B. normal goods.
C. complements.
D. substitutes.
Answer: C
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Economic efficiency requires that Pareto improvements still be possible
a. True b. False
Among the people who are characterized below, who has the highest opportunity cost of leisure?
a. an attorney who earns $200 per hour and who plays golf during her leisure time b. a medical doctor who earns $210 per hour and who sleeps during his leisure time c. a retail clerk who earns $15 per hour and who watches TV during her leisure time d. a waiter who earns $12 per hour and who reads poetry during his leisure time
Why is the multiplier principle important?
What will be an ideal response?
The value of intermediate goods is not included in the calculation of GDP to avoid the problem of
A. depreciation. B. inflation. C. double counting. D. transfer payments.