A car dealer advertises free satellite radio for one year with the purchase of a new car. This is an example of:
A. bait and switch.
B. marginal sales.
C. an incentive.
D. voluntary exchange.
C. an incentive.
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Mattress savings are: a. used to buy bonds and shares
b. kept in a current account. c. kept in a savings account. d. kept on hand and not loaned out or invested.
How do growth rates vary across countries? Are the rich countries getting richer while the poor are getting poorer?
Suppose that high-definition television sets (HDTVs) are normal goods. Would the compensated demand curve for HDTVs be flatter or steeper than the uncompensated demand curve? Explain your answer using a carefully-labeled graph.
What will be an ideal response?
Smith's income was $50,000 in year 1 and $55,600 in year 2. The CPI was 114 in year 1 and 124 in year 2. What was the approximate percentage change in Smith's real income between the two years?
A) -2.2 percent B) +3.4 percent C) -1.7 percent D) +5.6 percent E) +2.2 percent