If a good has a negative income elasticity of demand, this indicates that the good is
A) normal. B) a substitute with another good.
C) inferior. D) a complement with another good.
C
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The problem of excess pollution mainly occurs because of
A) asymmetric information. B) a positive externality. C) a negative externality. D) a monopoly.
One weakness of the Sherman Act is that
A) it fails to clearly define restraint of trade. B) it applies only to foreign monopolies. C) it applies only to the steel and railroad industries. D) none of the above.
Refer to Figure 6.3. If the market is in equilibrium, the consumer surplus is:
A. area ABC. B. area BCD. C. zero. D. area ACD.
To choose, based on the principle of rational choice, among combinations of goods with a cost in money, one must compare:
A. total utility of the combination of goods and their price. B. marginal utility of each additional good and its price. C. total utility only. D. marginal utility only.