Suppose that the income elasticity of demand for good X is greater than 1. Other things being equal, which of the following statements is INCORRECT?
A. Good X is a normal good.
B. The quantity demanded of good X decreases as a consumer's income declines.
C. A consumer buys more X as income rises, but the share of income spent on good X falls.
D. A consumer buys more X as income rises and the share of income spent on good X also rises.
Answer: D
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With no international trade, a country ________ consume at a point outside of its PPF; with international trade, a country ________ consume at a point outside of its PPF
A) cannot; can B) can; can C) can; cannot D) cannot; cannot E) None of the above answers is correct because the presence or absence of international trade has nothing to do with where a country consumes in comparison to its PPF.
Some policymakers claim that raising the minimum wage will result in economic growth. If increasing the minimum wage would actually generate economic growth, we would expect to eventually see nominal wages ________ and unemployment ________
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
New entrants to the labor force usually account for around ________ percent of the unemployed
A) ten B) twenty C) twenty-five D) thirty
Which of the following statements best demonstrates the constraints under which individual consumers and society as a whole operate?
a. Only the individual opportunity set (or budget constraint) demonstrates the constraints under which individual consumers and society as a whole operate. b. Only the social production possibilities frontier demonstrates the constraints under which individual consumers and society as a whole operate. c. Neither the individual opportunity set (budget constraint) nor the social production possibilities frontier demonstrates the constraints under which individual consumers and society as a whole operate. d. Both the individual’s opportunity set (and budget constraint) and the social production possibilities frontier show the constraints under which individual consumers and society as a whole operate.