A 10 percent increase in income brings about a 15 percent decrease in the demand for a good. What is the income elasticity of demand and is the good a normal good or an inferior good?
What will be an ideal response?
The income elasticity of demand is -1.5. The good is an inferior good.
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Which of the following ideas describes the concept of "utilitarianism"? I. Utilitarianism gained popularity in the 1930s. II. Utilitarians believed that a society should use only competitive markets to allocate resources. III
Utilitarians claimed that taking money from rich people and giving it to poorer people would make the economy more fair. A) III only B) II only C) I and II D) I, II and III
Suppose that one-year Treasury bills yield 6 percent in the United States and 4 percent in Britain. Investors will be indifferent between them if they expect the dollar to
A) depreciate against the pound by approximately 2 percent. B) appreciate against the pound by approximately 2 percent. C) depreciate against the pound by approximately 33 percent. D) appreciate against the pound by approximately 33 percent.
If your income goes up by 2% and, in response, the quantity demanded of good x falls by 3%, the good x can be considered
a. An inferior good b. A normal good c. A public good d. A private good
Many economists believe that skill-biased technical change has increased the incomes of both highly skilled workers and low-skill workers
a. True b. False Indicate whether the statement is true or false