Recall the text's discussion of the ten largest U.S. industries by value added in 1860 and 1910 . The emergence of tobacco products and malt liquors as major industries by 1910 suggests that
a. these goods are highly income elastic.
b. these goods are highly income inelastic.
c. these goods are price inelastic.
d. these goods exhibit economies of scale in production.
a. these goods are highly income elastic.
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In Figure 3-2, a move from a point like B to a point such as D
A. is not possible. B. can be attained with a more efficient allocation of resources. C. can be attained if there is an improvement in technology. D. can be attained if unused resources are put into production.
An increase in the interest rate causes investment to
a. rise and the exchange rate to appreciate. b. fall and the exchange rate to depreciate. c. rise and the exchange rate to depreciate. d. fall and the exchange rate to appreciate.
Real wages more accurately reflect the payment to labor because they are adjusted for the effects of inflation.
Answer the following statement true (T) or false (F)
To maximize profit, a perfectly competitive firm
A) should sell the quantity of output determined by the interaction between industry demand and supply. B) should sell the quantity of output that results in a value for total revenue that is equal to total cost. C) should produce the quantity of output that results in the greatest difference between total revenue and total cost. D) should produce the quantity of output that results in the greatest difference between marginal revenue and marginal cost.