Joe consumes 10 units of food and 12 units of clothing. Since food is an inferior good, a gift to Joe of a $12 gift certificate at a clothing store will:
A. definitely make Joe worse off than a gift of $12 in cash.
B. definitely make Joe better off than a gift of $12 in cash.
C. induce Joe to eat more than 10 units of food.
D. None of the statements is correct.
Answer: D
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The short-run aggregate supply curve shifts when
I. the full-employment quantity of capital changes. II. technology advances. A) I only B) II only C) neither I nor II D) I and II
A country produces two goods, soda and chips. It currently exports soda and imports chips. If it were to impose a tariff on chips,
a. both imports of chips and exports of sodas would rise. b. imports of chips would rise, but exports of sodas would fall. c. imports of chips would fall, but exports of sodas would rise. d. both imports of chips and exports of sodas would fall.