What types of goods have downward-sloping Engel curves?
a. Normal goods only.
b. Inferior goods only.
c. Giffen goods only.
d. All types of goods.
b. Inferior goods only.
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If home prices are falling, consumers purchasing a home will find their purchasing power of money has increased. This benefit to consumers is called the
A) home equity effect. B) inflation effect. C) wealth effect. D) multiplier effect.
If smartwatches are considered substitutes for smartphones, the decline in the price of smartphones would, all else equal,
A) decrease the demand for smartwatches. B) increase the demand for smartwatches. C) increase the quantity of smartwatches demanded. D) decrease the quantity of smartwatches demanded.
According to the Keynesian model, an increase in autonomous investment leads to
A) a more than proportional decrease in real Gross Domestic Product (GDP). B) a less than proportional decrease in real Gross Domestic Product (GDP). C) a proportional increase in real Gross Domestic Product (GDP). D) a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP).
If the marginal product of labor is always positive, the total revenue will grow with each additional worker. Firms do not continuously hire new workers because:
a. there isn't enough room in the factory. b. there isn't an infinite number of workers. c. wages would have to increase. d. they stop when MRP = wage e. marginal revenue product will become negative.