Which of the following have to be true about functions in the duality picture:
A. The expenditure function is homogeneous of degree 1 in prices.
B. The compensated demand functions are homogeneous of degree 1 in prices.
C. The uncompensated demand functions are homogeneous of degree 1 in prices.
D. Both (a) and (b).
E. Both (b) and (c).
F. Both (a) and (c).
G. All of the above.
H. None of the above.
Answer: A
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Firms in a perfectly competitive industry are earning economic losses. This is
A) a signal to entrepreneurs that some of the firms in the industry should exit and the resources of these firms should move into production of other goods. B) a signal to entrepreneurs that additional resources should be brought into this industry in order to make it profitable. C) a signal that the entrepreneurs are doing a poor job and should become workers for someone else. D) a signal to government officials that a subsidy is needed for the firms in the industry.
The two standard ways of defining poverty thresholds are
a. percentage of median income and basic needs b. number of poor and quintiles c. unearned income of the poor and and welfare d. ratio of the poor's wealth and ratio of the poor's income e. below minimum wage income and above minimum wage income