As a group, U.S. consumers view hamburger as a normal good at low income levels and as an inferior good at high income levels. Based on this information, which of the following statements is NOT true?
A) As income for all consumers rises, the hamburger demand curves of low-income consumers shift rightward, and the demand curves of high-income consumers shift leftward.
B) The aggregate demand curve for hamburger in the U.S. is upward sloping at low prices.
C) The Engel curve for hamburger consumed in the U.S. is upward sloping at low income levels and downward sloping at high income levels.
D) The income-consumption curve for hamburger and all other food products cannot be a straight line.
B
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The long-run aggregate supply curve intersects the horizontal axis at the:
A. actual rate of inflation. B. potential level of output. C. expected rate of inflation. D. current level of output.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.
Explain how mandatory seat belt laws may reduce the negative externalities of risky behavior
What will be an ideal response?
Robert only consumes X and Y, and his indifference curves have the usual convex shape. Consider the consumption bundles (3, 9), (6, 6), and (9, 3) (Hint: The consumption bundles completely exhaust Robert's income). If Robert is indifferent between (3, 9) and (9, 3), then:
A. he prefers (6, 6) over both (3, 9) and (9, 3). B. he prefers (6, 6) over (3, 9) but not over (9, 3). C. he prefers (3, 9) over (6, 6). D. he prefers (9, 3) over (6, 6).