Differentiate between a normal (superior) and an inferior good
Please provide the best answer for the statement.
A normal (superior) good is one whose demand varies directly with income as is true for most goods and services the more income one earns, the more one is willing and able to buy. However, there are exceptions, called inferior goods, whose demand varies inversely with income. Inferior goods are those whose demand increases when incomes fall and vice versa.
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Assume a firm reduces its cost by shifting from paychecks to payroll cards, which are stored-value cards onto which the companies can download employees' wages and salaries electronically. If the only factor of production the firm varies in the short run is the number of hours worked by people already on its payroll, would the shift from paychecks to payroll cards reduce the firm’s total fixed costs or its variable costs?
A. Since the wages paid to? employees, the? firm's variable labor? input, have not? changed, variable costs are unaffected. If the switch from issuing paychecks to payroll cards is? cost-reducing, this change will cut its fixed costs of meeting its payrolls. B. Since the number of hours worked is? variable, the variable cost of processing the payroll? changes; therefore, the cost savings must come from a reduction in variable costs in the short run. C. Since the number of hours worked is? variable, the variable cost of processing the payroll? changes; therefore, the cost savings must come from a reduction in variable costs in the long run. D. Since the wages paid to? employees, the? firm's variable labor? input, have? changed, if the switch from issuing paychecks to payroll cards is? cost-reducing, this change will cut its variable costs of meeting its payrolls.
Because many immigrants are in low-paying jobs, they do not own homes but rent houses or apartments instead, and so they do not pay property taxes. What effect does this have on local tax revenue?
a. Very little, because landlords pay property taxes on rental units, which is reflected in the amount of rent charged b. A moderate impact, because most immigrant taxes go to the state in the form of income and sales tax c. A large impact, because immigrants use local services such as schools but do not pay for them d. A small impact, because most communities have few immigrants, and therefore the taxes they pay are negligible
The theory of liquidity preference assumes that the nominal supply of money is determined by the
a. level of real output only. b. interest rate only. c. level of real output and by the interest rate. d. Federal Reserve.
If the natural rate of unemployment falls,
a. both the short-run Phillips curve and the long-run Phillips curve shift. b. only the short-run Phillips curve shifts. c. only the long-run Phillips curve shifts. d. neither the short-run nor the long-run Phillips curves shift.