The income elasticity of demand for agricultural products is typically
a. less than zero.
b. greater than zero, but less than one.
c. greater than one.
d. infinity.
b. greater than zero, but less than one.
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Refer to Edgeworth Box Economy. In an Edgeworth box, points within the region of mutual advantage represent allocations that
a. can be achieved by a competitive market. b. both consumers prefer to the initial endowment. c. exhaust the potential gains from trade. d. are Pareto optimal.
An open market purchase by the Fed
A) increases the total amount of reserves in the banking system. B) causes the reserve requirement to fall. C) does not change the total amount of reserves in the banking system. D) decreases the total amount of reserves in the banking system.
The demand for necessities generally is ________ the demand for luxury goods
A) as elastic as B) more elastic than C) less elastic than D) flatter than E) not comparable to
When the price of gasoline rises, some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars. The fact that the CPI does not fully account for such changes in consumer behavior is called
A) increase in quality bias. B) outlet bias. C) substitution bias. D) discrimination bias.