Related to the Economics in Practice on p. 476: According to the "paradox of thrift," decreased efforts to save will cause a(n)
A. decrease in income but an increase in saving.
B. decrease in income and an overall decrease in saving.
C. increase in income but no overall change in saving.
D. increase in income and an increase in overall saving.
Answer: D
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Income effects are negative for normal goods, and positive for inferior goods.
Answer the following statement true (T) or false (F)
In order to avoid principal-agent problems, McDonald's uses all but one of the following franchising tactics. Which is the exception?
a. It does not advertise for franchisees. b. Franchisees must put up 40 percent of the investment themselves. c. Franchisees must undergo a preliminary training period, followed by a 12- to 18-month training program. d. Franchisees must already have another fast-food restaurant franchise. e. Franchisees are required to work full-time daily in their restaurant.
If your salary doubled and the cost of living doubled, then your real wage rate would _______.
Fill in the blank(s) with the appropriate word(s).
The optimum resource mix for a firm would be
A. wage rate/rent = MRP of labor/MRP of land. B. wage rate × rent = MRP of labor × MRP of land. C. MRP of labor/wage rate = MRP of land/rent. D. None of these choices are correct.