Suppose the income elasticity of demand for toys is +2.00. This means that:
A. a 10 percent increase in income will increase the purchase of toys by 20 percent.
B. a 10 percent increase in income will increase the purchase of toys by 2 percent.
C. a 10 percent increase in income will decrease the purchase of toys by 2 percent.
D. toys are an inferior good.
Answer: A
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Which of the following is true of the balance of payments accounts?
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Information supplied to consumers by the government rarely ever helps in making better decisions
a. True b. False Indicate whether the statement is true or false
Monopolistically competitive firms can earning positive economic profits in the short run, but in the long run:
a. the level of profits will be unchanged. b. they will make zero economic profits. c. firms will be unable to enter the industry because of the existence of barriers to entry. d. a limited number of firms will enter the industry, and profits will be reduced but will remain positive.