About six months ago, Pat lost the job as vice president of a local bank. Since losing the job, Pat still has the Sunday newspaper delivered every week. For Pat, the Sunday newspaper is
A) income inelastic.
B) price inelastic.
C) an inferior good.
D) a normal good because Pat still buys the paper even with a big loss of income.
A
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Lucy buys only magazines and CDs. Both are normal goods. Lucy's income decreases, but the prices of magazines and CDs do not change. Marginal utility theory predicts that Lucy will ________
A) buy fewer magazines and fewer CDs B) substitute magazines for CDs C) increase her marginal utility from both magazines and CDs by buying more magazines and CDs D) buy more magazines and more CDs
Velocity is defined as
A) P + M + Y. B) (P × M)/Y. C) (Y × M)/P. D) (P × Y)/M.
There is a strong consensus among economists in favor of free trade. Governments appreciate the reasons for free trade as well but they may sometimes restrict trade because
a. their absolute advantage is greater than their comparative advantage b. their comparative advantage is greater than their absolute advantage c. the trade generates negative gains d. they may want to protect infant industries e. they prefer dumping to trade
U.S. income data over the last 75 years suggests that the distribution of income
a. has gradually become more equal over the entire time period. b. has gradually become less equal over the entire time period. c. gradually became less equal until about 1970, then became more equal from 1970 to 2011. d. gradually became more equal until about 1970, then became less equal from 1970 to 2011.