If a country's Gini coefficient had a value of one, this means:
a. the country has a perfectly even distribution of income.
b. income is fairly evenly distributed across the country.
c. income is fairly uneven across the country.
d. all the income in the country goes to one person.
Ans: d. all the income in the country goes to one person.
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Refer to the following graph. If the price is currently $1.80 then the firm is
a. losing money but should remain in operation.
b. losing money and should shut down to minimize losses.
c. breaking even when it produces 13 units.
d. earning an economic profit.
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. The expected value of the payoff is _____ for the first game and _____ for the second game.
A. $5.00; $4.50 B. $5.75; $4.50 C. $4.50; $5.75 D. $5.75; $5.25
When the existing firms in a monopolistically competitive industry earn above-normal profit:
a. new firms enter into the market, and entry continues until firms earn normal profit. b. new firms have no incentive to enter the market. c. new firms have an incentive to enter the market but are legally barred from doing so. d. they increase their production and lower the price level. e. their cost structure automatically changes, eliminating the additional profit.
Which of the following is an example of the wealth effect during a period of inflation?
A. A firm receives a fixed price for the services it sells while the price level is rising B. You hold money in a savings account that earns 5 percent interest while the price level doubles C. Your income stays constant while the price level doubles D. You pay for utilities that are becoming more expensive as the price level is rising