If incomes fall by 5 percent and the quantity demanded for new cars falls by 10 percent,
A. New cars are an inferior good, and the income elasticity is +0.5.
B. New cars are a normal good, and the income elasticity is +2.0.
C. New cars are a normal good, and the income elasticity is +.5.
D. New cars are an inferior good, and the income elasticity is +2.0.
Answer: B
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In the figure above, what is the loss of consumer surplus if the firm is a perfectly price-discriminating monopoly instead of a perfectly competitive industry?
A) $0 B) $22.50 C) $45.00 D) $90.00
If the market price of a good does NOT include all of the costs and benefits that arise from the production or consumption of the good, then
A) the market is perfectly competitive. B) an externality is present. C) society is consuming and producing the optimal amount of the good. D) resources are properly allocated.
Which of the following is true?
a. The GDP gap is the difference between full-employment real GDP and actual real GDP. b. All of the answers are correct. c. We desire economic growth because it increases the nation's standard of living. d. Discouraged workers are a reason critics say the unemployment rate is understated. e. Economic growth is measured by the annual percentage increase in a nation's real GDP.
In the prisoner's dilemma game:
A. both players have a dominant strategy. B. neither player has a dominant strategy. C. only one player will ever have a dominant strategy. D. All of these may be true in a prisoner's dilemma game.