Xanfix sells wrenches and screwdrivers. It sells both products at the same price of $9.66 per unit. The firm calculates that the income elasticity of demand for wrenches is 1.5, while the income elasticity of demand for screwdrivers is 2.5 . If the overall consumer income is expected to increase by 6.8 percent in the year ahead, the company should:
a. increase the production of both products,
but it should increase the production of screwdrivers by a greater amount than the production of wrenches.
b. increase the production of both products, but it should increase the production of wrenches by a greater amount than the production of screwdrivers.
c. increase the production of wrenches and decrease the production of screwdrivers.
d. increase the production of screwdrivers and decrease the production of wrenches.
a
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Monetary policy is ________ flexible than fiscal policy because monetary policy changes are made by ________, while fiscal policy changes must be made by ________.
A. more; the President; legislative action B. more; legislative action; the FOMC C. more; the FOMC; legislative action D. less; the FOMC; the President
Refer to Budget Lines. The only situation where we can conclude that this consumer's tastes must have changed is when we observe himAnswer the following statement(s) true (T) or false (F)
a. buying B last year and buying A this year.
b. buying D last year and buying A this year.
c. buying B last year and buying C this year.
d. buying D last year and buying C this year.
When a farmer uses someone else's land in exchange for a percentage of the crop, this is called
a. rental contract b. labor contract c. sharecropping d. tenancy e. none of the above
It seems quite possible that cigarette companies concealed information about the effects of smoking on health, causing cigarette prices to be __________ and cigarette sales to be __________ than would have been the case under symmetric information.
A. higher; higher B. higher; lower C. lower; higher D. lower; lower