Which of the following should be held constant when calculating an income elasticity of demand?
a. the quantity of the good demanded
b. the price of the good
c. income
d. All of the above should be held constant.
b
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A monopolistically competitive firm in short-run equilibrium:
A) will make negative profit (lose money). B) will make zero profit (break-even). C) will make positive profit. D) Any of the above are possible.
Which of the following statements is true?
a. Derived demand for labor depends on the demand for the product labor produces. b. Unions can either increase demand or decrease the supply of labor. c. Investment in human capital is expected to increase the demand for those workers. d. All of these.
The risk of specializing (in the production of one good or service) is
A) lower in a barter economy than in a money economy. B) lower in a money economy than in a barter economy. C) the same in both a money and barter economy. D) greater the less likely you and the person you want to trade with have a double coincidence of wants. E) b and d
As the economy declines into recession, the collection of personal income tax revenues automatically falls. This phenomenon best illustrates how a progressive income-tax system:
A. Increases crowding out in the economy B. Decreases real interest rates in the economy C. Offsets the timing problem for fiscal policy D. Serves as an automatic stabilizer for the economy