If the income elasticity of a good is negative, we can conclude that the good is
a. an inferior good.
b. a normal good.
c. a luxury good.
d. a necessity.
A
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A trade surplus means:
A) the country has positive net savings, which it lends abroad. B) the country has negative net savings, which it lends abroad. C) the country has positive net savings, which it borrows from abroad. D) the country has negative net savings, which it borrows from abroad.
Some countries have had high inflation for a long time. Others have had low or moderate inflation for a long time. Which of the following, at least in theory, could explain why some countries would continue to have high inflation?
a. High inflation countries have relatively small sacrifice ratios and so see no need to reduce inflation. b. Inflation reduction works best when it is unexpected, and people in high inflation countries would quickly anticipate any change in monetary policy. c. In a country where inflation has been high for a long time, people are likely to have found ways to limit the costs. d. In a country where inflation has been high for a long time, there are no costs to the inflation.
You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. What is your opportunity cost of seeing a movie this afternoon?
A. $8 B. $12 C. $57 D. $22
Under a price ceiling, the full economic price is
A. higher than the free-market price. B. the dollar price paid to the firm. C. lower than the free-market price. D. the opportunity cost of not being able to buy a good when a consumer needs it.