In the above figure, income is $8, the price of a soft drink is $1, and the initial price of a milkshake is $2. If the price of a milkshake decreases to $1, the income effect is the movement from point ________ to point ________
A) a; b
B) b; d
C) b; c
D) a; c
C
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Because of assortative mating, wealth becomes ________ and the distribution of wealth becomes more ________
A) more concentrated in a small number of families; equal B) more concentrated in a small number of families; unequal C) spread out among more families; equal D) spread out among more families; unequal
The following are all determinants of income differences examined in the text EXCEPT
A) age. B) marginal productivity. C) inheritance. D) height.
Suppose Company P could create a socially beneficial product if they were sure they could make a profit by doing so. What could the government do to help them?
a. Grant a patent to Company P to eliminate competition for a period of time. b. Pass legislation requiring Company P to create the product. c. Place a restriction-of-trade tax on Company P if they fail to create the product. d. Seize the plans for the product and create the product in a government facility.
A fall in the price of a good causes an increase in its:
A. quantity demanded. B. demand. C. quantity supplied. D. supply.