In economic language, children may sometimes be considered an "inferior good." What does that mean and why might it be true?
What will be an ideal response?
An inferior good is one for which smaller quantities are demanded at higher levels of income. The discussion should be framed in terms of greater opportunity cost of children when incomes rise and the substitution of quality of children (better health, education) for quantity.
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Refer to the payoff matrix below. Which of the following is true for Best Lights?
A) They do not have a dominant strategy.
B) Their pure strategy is to set a Low Price.
C) They do not have a pure strategy.
D) Their pure strategy is to set a High Price.
The main difference between direct and indirect taxes is that
A. indirect taxes are automatically deducted from workers’ paychecks and direct taxes are not. B. direct taxes are paid to state and local governments and indirect taxes are paid to the federal government. C. direct taxes are taxes levied on people and indirect taxes are taxes levied on activities undertaken by people. D. direct taxes are usually proportional and indirect taxes are usually progressive.
A radio manufacturer is experiencing theft problems at its warehouse and has decided to hire security guards to reduce the thefts. The firm wants to minimize the net cost of warehouse thefts. 
Given the above info, if each security guard is paid $200 a week and the cost of a stolen radio is $25, how many security guards should the firm hire?
A. 1 B. 2 C. 3 D. 4 E. 5