To determine whether a particular good is a normal good, a luxury good, or an inferior good, you would want to observe what happens to demand for the good when __________ changes.
A. supply
B. the price of raw materials
C. price
D. income
Answer: D
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If demand is taken into account, firms that use cost-plus pricing can adjust price by
A) letting sales fall, but hold the markup constant if demand falls. B) lowering markups on price-elastic goods and raising markups on price-inelastic goods. C) letting sales rise, but hold the markup constant if demand rises. D) raising markups on price-elastic goods and lowering markups on price-inelastic goods.
The "effectiveness lag" in monetary policy is the amount of time it takes
A) to collect the data to determine if a policy change is required. B) for monetary policy to have an impact on inflation and unemployment. C) for monetary policy to affect the money supply. D) to collect the data to determine what effect monetary policy has had on the economy.
Haley has 20 hours to devote to work or leisure. If she wants to increase her income, she must increase both her labor and leisure hours at the same time
a. True b. False Indicate whether the statement is true or false
In 1981, the US government passed a law that significantly lowered tax rates on high-income individuals. The premise was that high tax rates deter high-income individuals from working and investing, reducing the growth of the economy. This is an example of
A. the equality-efficiency trade-off. B. usury. C. the effects of budget deficits on future generations. D. the cost disease of the public sector. E. the importance of externalities.