Claudia spends her income on two goods, Blu-ray rentals and chewing gum. She considers both goods to be normal goods. If Claudia's income increases and the prices of the two goods remain constant, she will:
A. rent more Blu-rays and purchase less chewing gum.
B. rent more Blu-rays and purchase more chewing gum.
C. rent fewer Blu-rays and purchase more chewing gum.
D. rent fewer Blu-rays and purchase less chewing gum.
Answer: B
You might also like to view...
Command-and-control regulation, as compared to incentive-based regulation, is:
a. efficient in the short run and in the long run. b. efficient in the short run, but not in the long run. c. inefficient in the short run, but efficient in the long run. d. inefficient in the short run and long run.
Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples. If the terms of trade are established as 1 ton of apples for 2 tons of oranges: a. there are no incentives for Omega to engage in international specialization and trade of apples and oranges. b. it is in the interest of Omega to grow oranges and trade
for apples. c. it is in the interest of both countries to specialize and trade with one another. d. there are no incentives for Alpha to specialize and trade with Omega.
If the government imposes a price floor above the equilibrium price,
a. producers will eventually go out of business b. market equilibrium will result c. there will be an excess demand d. consumers will benefit e. producers will benefit
Net exports
a. will increase if exports of goods decline b. will increase if imports of goods rise c. are neither part of GDP nor national income d. are part of national income but not GDP e. are part of GDP and are derived by subtracting imports from exports