Median household income is $50,000 per year. The typical household spends about $125 per year on milk, which has an income elasticity of about 0.07. From this information, we can conclude that
A) milk is a luxury.
B) milk is a Giffen good.
C) the income effect from a change in the price of milk is very large.
D) the income effect from a change in the price of milk is very small.
D
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In a competitive separating equilibrium, low cost consumers of insurance will not fully insure because insurance rates offered to them are not actuarily fair.
Answer the following statement true (T) or false (F)
The demand for orthodontists' services falls as the proportion of the population that obtains braces falls. It may take several years before the new long-run equilibrium for the orthodontic labor market is attained
In the meantime, the orthodontic labor market experiences a A) shortage. B) quality decrease. C) surplus. D) excess demand.
Among economists today, the most widely accepted cause of the Great Depression is:
A. Adolf Hitler's election as Chancellor of Germany. B. globalization. C. poor economic policymaking. D. wild stock market speculation on Wall Street.
The nation of Openia allows free trade and exports steel. If steel exports were prohibited, the price of steel in Openia would be ________, benefiting steel ________.
a. lower, consumers b. higher, producers c. lower, producers d. higher, consumers