A good is an inferior good if the consumer buys more of it when
a. his income rises.
b. the price of the good falls.
c. the price of a substitute good rises.
d. his income falls.
d
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Raising the tax rate lowers the tax-adjusted MPC
Indicate whether the statement is true or false
The measurement of GDP handles underground production by
A) including the amount produced in this sector of the economy in exactly the same way that all other production is included. B) omitting it because underground production is unreported to the government by the people involved. C) adding it at fixed prices that change only infrequently. D) adding an estimate of it because it is difficult to precisely measure underground production. E) omitting it because, being illegal, it has no effect on the nation's total production.
What is the shape of the AS in the short run and the long run?
a. AS is relatively flat in both the short and long run. b. AS is relatively flat in the short run, but steeper in the long run. c. AS is relatively steep in both the short and long run. d. AS is relatively steep in the short run, but flatter in the long run.
Consider the market for land. Suppose the value of the marginal product of land decreases. Holding all else constant, the equilibrium rental price for land will
a. increase. b. decrease. c. not change. d. It is not possible to determine what will happen to the equilibrium rental rate.