Which of the following is a normative statement?
A. An economy with high unemployment can be worse off than an economy with high inflation.
B. A decrease in the rate of unemployment will lead to upward pressure on consumer prices.
C. An increase in consumer income will lead to increased sales of beef.
D. An increase in the income tax will cause a greater reduction in savings than an increase in the sales tax.
Answer: A
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According to human capital theory, all of the following help make workers more productive EXCEPT
A) health and fitness. B) increased unemployment benefits. C) skills. D) education.
How can the Gordon Growth model help explain the major decline in stock indexes during 2007-2009?
A) There was an increase in the required return on equities and a decrease in the expected growth rate of dividends. B) There was a decrease in the required return on equities and an increase in the expected growth rate of dividends. C) There was an increase in the required return on equities and an increase in the expected growth rate of dividends. D) There was a decrease in the required return on equities and a decrease in the expected growth rate of dividends.
Economists cite some beneficial effects of price discrimination. What are these benefits and how do the antitrust laws treat price discrimination?
What will be an ideal response?
An increase in price causes:
A. a decrease in total revenue due to the price effect. B. an increase in quantity demanded. C. an increase in total revenue due to the price effect. D. an increase in total revenue due to the quantity effect.