For a normal good, an increase in consumer income will lead to I. a movement down the demand curve II. a rightward shift in the demand curve III. a reduction in supply
A) I only
B) II only
C) III only
D) Both II and III
B
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In the figure, the equilibrium price is initially $3 per bushel of wheat. If suppliers come to expect that the price of a bushel of wheat will rise in the future, but buyers do not, the current equilibrium price will
A) rise. B) not change. C) fall. D) Perhaps rise, fall, or stay the same, depending on whether there are more demanders or suppliers in the market.
A mother of three who receives $600 a month in total welfare benefits if she is not working, but who loses all those benefits and also pays 10 percent of her earnings to the tax collector if she takes a job paying $1000 a month, is being taxed on her
earnings at an effective marginal rate of A) 10 percent. B) 30 percent. C) 50 percent. D) 70 percent.
Suppose that a factory is located on the outskirts of a small town. As a by-product of its production process, it produces sulfur dioxide that gets released into the air. The sulfur dioxide lowers the quality of the in the town
Suggest some possible remedies for this negative externality.
Reasons for greater income inequality in less-developed countries than in developed economies are all the following except
a. marginal revenue product of labor is low b. marginal revenue product of capital c. low levels of education are attained d. the economy is in the early stages of transforming from predominantly agricultural to industrial production e. societal preference for income inequality