Suppose a consumer only consumes goods x and y, and suppose that x is a normal good while y is an inferior good. Which of the following is might be true?
A. The cross-price elasticity of demand for x is positive.
B. The cross-price elasticity of demand for x is negative.
C. The own-price elasticity of demand for y is positive.
D. The own-price elasticity of demand for y is negative.
E. Both (a) and (c).
F. Both (b) and (d).
G. All of the above.
H. None of the above.
Answer: G
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a. steamship companies b. mining companies c. manufacturing companies d. railroads e. All of the above benefited from immigration.
Because the marginal product of a variable resource at first increases and then decreases as the output of the firm is increased:
A. total cost at first increases at a decreasing rate and then increases at an increasing rate. B. total variable cost at first increases at an increasing rate and then increases at a decreasing rate. C. average total cost at first increases and then diminishes. D. average fixed cost will rise beyond the point of diminishing returns.
If a nation imposes tariffs and quotas on foreign products, the immediate effect will be to:
A. reduce the rate of domestic inflation. B. increase efficiency in the world economy. C. increase domestic output and employment. D. reduce domestic output and employment.
A firm decides to hire more equipment if:
a. the average revenue it earns by selling its output is equal to its average cost. b. its total revenue is greater than the total cost of hiring the equipment. c. the marginal revenue product of the additional unit of equipment is greater than the marginal factor cost. d. its average revenue is greater than the average cost of hiring equipment. e. the price of its product is greater than the average cost of production.