The percentage change in quantity demanded divided by the percentage change in income is the formula for:
a. cross-price elasticity of demand.
b. income elasticity of demand.
c. elasticity of savings.
d. wage elasticity of labor supply.
b. income elasticity of demand.
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If you get an 8 percent increase in your nominal income, your real income
A) definitely increases. B) increases only if the inflation rate is more than 8 percent. C) increases only if the inflation rate is equal to 8 percent. D) increases only if the inflation rate is less than 8 percent. E) increases if the inflation rate is more than or equal to 8 percent.
From the economist's point of view
A) wants and needs are exactly the same. B) a want is a lifesaving necessity. C) needs are objectively undefinable. D) we all have wants but only very poor people have needs.
Refer to the above figure. The firm is operating using MRP0. An increase in productivity has occurred. The relevant curve for the firm after the increase in productivity
A) is MRP0. B) is MRP1. C) is MRP2. D) could be MRP1 or MRP2 depending upon whether the firm was earning a positive profit.
Which of the following is an assumption that economists make?
A. Most people possess entrepreneurial talent. B. People are very good at assessing the costs of decisions accurately. C. Individuals and firms will act to provide the things people want. D. Individuals usually fail to optimize the use of their resources because they think on the margin.