Suppose technological improvements reduced the cost of producing automobiles by 50 percent, causing the price of automobiles to decline by a similar amount. Which of the following would necessarily result from this development?
a. Employment in the automobile industry would decrease.
b. Real income would increase.
c. Real income would decrease.
d. Both a and c are correct.
B
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The main duty of the Environmental Protection Agency (EPA) is to: a. assure safe work places
b. prevent crime. c. enforce environmental standards. d. regulate air transport. e. regulate rates charged by generators of nuclear energy.
Rational expectations are forecasts that, although not necessarily correct, are the best that can be made given the available information.
Answer the following statement true (T) or false (F)
The cross price elasticity of demand is measured by the
A. percentage change in the price of one good divided by the percentage change in the demand for another good. B. percentage change in the quantity demanded of one good divided by the percentage change in quantity demanded of another good. C. percentage change in the demand for one good divided by the percentage change in price of another good. D. percentage change in the price of one good divided by the percentage change in price of another good.
If Claudette gets a permanent increase in her income of $1000 per year, she saves an extra $200 this year and consumes an extra $800 this year. If the increase in income had been temporary instead of permanent, she would have saved ________ of the extra income.
A. less than $200 B. exactly $200 C. more than $200 D. none