A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded, P is the product price, and I is consumer income
To compute an appropriate value for c, we can use observed values for Q and I and then set the estimated income elasticity of demand equal to: A) c(I/Q)
B) c(Q/I)
C) -b(I/Q)
D) Q/(cI)
A
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Refer to Figure 2-17. One segment of the circular flow diagram in the figure shows the flow of funds from economic agents E to market F. Who are economic agents E and what is market F?
A) E = households; F = product markets B) E = households ; F = factor markets C) E = firms; F = product markets D) none of the above
Suppose that country X can produce 1,000 pounds of flour per hour, or catch 500 pounds of fish per hour. In contrast, country Y can produce 1,800 pounds of flour per hour, or catch 300 pounds of fish per hour. If both countries specialize in their comparative advantage and trade, by how much combined output of fish and flour per hour be greater than if there were no trade and the countries divide
an hour of time equally between each output? a. 200 pounds of flour and 200 pounds of fish. b. 400 pounds of flour and 100 pounds of fish. c. 50 pounds of flour and 50 pounds of fish. d. 160 pounds of flour and 200 pounds of fish.