Steak and chicken are substitutes. A sharp reduction in the supply of steak would
a. increase consumer surplus in the market for steak and decrease producer surplus in the market for chicken.
b. increase consumer surplus in the market for steak and increase producer surplus in the market for chicken.
c. decrease consumer surplus in the market for steak and increase producer surplus in the market for chicken.
d. decrease consumer surplus in the market for steak and decrease producer surplus in the market for chicken.
c
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The gravity equation was tested and found to be very accurate in predicting:
a. world trade in total. b. trade between various provinces in Canada and American states. c. trade between the United States and Japan. d. trade between nations in the European Union.
Which of the following represents a problem in measuring inequality?
a. Measurements of income distributions typically include in-kind transfers, which distort the measure of inequality. b. A normal life-cycle pattern causes inequality in the income distribution but may not reflect inequality in living standards. c. Transitory income is a better measure of inequality than permanent income. d. Both a and b are correct.