When Jamar has an income of $2,000 . he consumes 30 units of good A and 50 units of good B. After Jamar's income decreases to $1,500, he consumes 33 units of good A and 45 units of good B. Which of the following statements is correct?
a. Both goods A and B are normal goods.
b. Both goods A and B are inferior goods.
c. Good A is a normal good, and good B is an inferior good.
d. Good A is an inferior good, and good B is a normal good.
d
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In order to correct the problems associated with external costs,
A) the signals given to the economy must change so that decision-makers will take into account all the costs of their actions. B) the government must take over production of industries that are responsible for most of the pollution. C) standards must be established that make it illegal to pollute. D) the prices of all goods must be raised so people will consume less of the world's resources.
If wage falls below the rate determined by the market equilibrium, in which direction will it move and why?