An inferior good is one that
a. people consume if their income falls
b. people consume more of if their income falls
c. people never consume
d. people consume if their income rises
e. people consume more of if their income rises
B
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A common pool resource is nonrival and nonexcludable
Indicate whether the statement is true or false
One of the differences between the GDP deflator and the consumer price index is
a. the GDP deflator includes income earned by American citizens working in foreign countries and the consumer price index is based solely on purchases made in the U.S. b. the consumer price index basket of goods is updated constantly by the Bureau of Labor Statistics whereas the GDP deflator is updated only occasionally. c. the consumer price index includes items not included in the GDP deflator such as airplanes purchased by the Air Force. d. the GDP deflator reflects prices for all goods and services produced domestically and the consumer price index reflects prices for some goods and services bought by consumers.
Suppose workers become pessimistic about their future employment, which causes them to save more and spend less. If the economy is on the intermediate range of the aggregate supply curve, then:
A. both real GDP and the price level will fall. B. real GDP will fall and the price level will rise. C. real GDP will rise and the price level will fall. D. both real GDP and the price level will rise.
Price elasticities are calculated for four goods, and the values are: 5.5; 3.5; 1.0; 0.2. Which price elasticity is most elastic?
A. 0.2 B. 3.5 C. 5.5 D. 1.0