If an increase in income results in a decrease in the quantity demanded for a product, the product is ________, and the value of the income elasticity of demand is ________.
A. a normal good; positive
B. a normal good, negative
C. an inferior good; positive
D. an inferior good; negative
Answer: D
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Refer to the scenario above. If you lend $30,000 to your friend for 30 years, you will receive ________ when he repays the amount after 30 years
A) $552,604.62 B) $523,482.07 C) $1,521,725.58 D) $3,620,025.01
If Oscar's MPC is 0.95 and he earns an additional $2,000, how much would he spend?
a. $100 b. $1,900 c. $2,105 d. $40,000
If a person's nominal income increases by 5% while the price level increases by 2%, the person's real income:
a. Decreases by 2% b. Decreases by 7% c. Increases by 5% d. Increases by 3%
Negative market feedback refers to a tendency for
A. one or two firms in an oligopolistic industry to respond to price decreases by initiating efforts to engage in price leadership. B. the dominant firm in an oligopolistic industry to react to competing firms' price increases by decreasing the price of its own product. C. price wars to break out in oligopolistic industries in which firms produce products possessing characteristics that make them prone to network effects. D. a particular product to fall out of favor with additional consumers because other consumers have stopped purchasing the product.