If the income elasticity of demand for good A was 3.9 and the income elasticity of demand for B was 0.2:
a. Both good A and good B are normal
b. Both good A and good B are inferior.
c. Good A is normal and good B is inferior.
d. Good A is inferior and good B is normal.
a
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Refer to Figure 9-9. Fenwick currently both produces and imports pistachios. The government of Fenwick decides to restrict international trade in pistachios by imposing a quota that allows imports of only 5 million pounds each year
Figure 9-9 shows the estimated demand and supply curves for pistachios in Fenwick and the results of imposing the quota. Answer questions a-j using the figure. a. If there is no quota what is the domestic price of pistachios and what is the quantity of pistachios demanded by consumers? b. If there is no quota how many pounds of pistachios would domestic producers supply and what quantity would be imported? c. If there is no quota what is the dollar value of consumer surplus? d. If there is no quota what is the dollar value of producer surplus received by producers in Fenwick? e. If there is no quota what is the revenue received by foreign producers who supply pistachios to Fenwick? f. With a quota in place what is the price that consumers of Fenwick must now pay and what is the quantity demanded? g. With a quota in place what is the dollar value of consumer surplus? Are consumers better off? h. With a quota in place what is the dollar value of producer surplus received by producers in Fenwick? Are domestic producers better off? i. Calculate the revenue to foreign producers who are granted permission to sell in Fenwick after the imposition of the quota. j. Calculate the deadweight loss as a result of the quota.
If wages and prices are flexible, then an anticipated change in the money supply will cause wages and prices to __________ the actual inflation rate
A) increase at the same rate as B) increase at a higher rate than C) increase at a slower rate than D) cannot be exactly predicted
Gordon presents several modern business cycle theories. He clearly states after all have been explained that he believes the most plausible of them to be the ________ model
A) Lucas information-barrier B) Friedman fooling C) New Keynesian D) real business cycle
Suppose that Paraguay can produce 12 wheat or 3 corn and Bolivia can produce 4 wheat or 2 corn. Suppose that opportunity costs are constant. Which of the following is a potentially agreeable trade arrangement for Paraguay and Bolivia?
A) Paraguay trades one corn to Bolivia for three units of wheat. B) Bolivia trades one corn to Paraguay for three units of wheat. C) Bolivia trades one corn to Paraguay for one wheat. D) Paraguay trades one wheat to Bolivia for two corn.