What is the difference between a normal good and an inferior good. Give an example of each
What will be an ideal response?
A good is a normal good if an increase in incomes leads to an increase in demand for a good. Most goods are normal goods. An example of a normal good is new clothes. A good is an inferior good if an increase in income leads to a decrease in demand for the good. Second-hand clothing that can be purchased at thrift stores is an inferior good.
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In the above table, what is the marginal factor cost of the 2nd worker?
A) $24 B) $14 C) $64 D) $12
If Pete raises his price of muffins from $2 to $3 and his sales revenue increases from $35,000 to $38,000 . then:
a. the demand for Pete's muffins in this range is price elastic. b. the demand for Pete's muffins in this range is price inelastic. c. the demand for Pete's muffins in this range is unit elastic. d. the percentage change in quantity demanded must exceed the percentage change in product price. e. this is impossible since this would violate the law of demand.
Which of the following statements is true?
a. The inclusion of intermediate goods and services into GDP calculations would underestimate our nation's production level. b. The expenditures approach sums the compensation of employees, rents, profits, net interest, and nonincome expenses for depreciation and indirect business taxes. c. Real GDP has been adjusted for changes in the general level of prices due to inflation. d. Real GDP equals nominal GDP multiplied by the GDP deflator.
Which of the following is not included in the current account of a nation's balance of payments?
A) Its goods exports. B) Its goods imports. C) Its net investment income. D) Its purchases of real assets abroad.