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.
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
How do growth rates vary across countries? Are the rich countries getting richer while the poor are getting poorer?