Many argue the poor are getting poorer, at least in a relative sense. Evidence that contradicts this is that
A) household income of the lowest twenty percent of households relative to the highest twenty percent of households has fallen over the last thirty years.
B) the official poverty level of income has increased over the years.
C) household spending of the lowest twenty percent of households relative to the highest twenty percent of households has held constant over the last thirty years.
D) the pretax distribution of income is more equal than the after-tax distribution of income.
C
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Suppose that the owner of a local ice cream store, knowing that demand for ice cream is higher when the weather is warmer, always charges a price in cents for a scoop of ice cream that is equal to two times the current outdoor temperature, measured in Fahrenheit (so that if it is 90 degrees outside, the ice cream is $1.80 per scoop). This type of behavior is ________.
A. exactly the type of behavior that Keynes believed most firms exhibit. B. free from menu costs. C. inconsistent with the key assumption upon which the basic Keynesian model is built. D. known as meeting demand.