Jill consumes nothing but soup and cola. It is possible that both soup and cola are necessities for Jill
Indicate whether the statement is true or false
False. The weighted sum of income elasticities must add up to one. This implies that at least one income elasticities must be >1. Intuitive response — if income rises, the weighted percentage increase in consumption cannot exceed the percentage increase in income without violating the budget constraint.
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Explain how advances in technology are critical to sustaining economic growth, even if capital per hour worked is consistently increasing. Provide a graph of a per-worker production function to support your answer
What will be an ideal response?
In a perfectly competitive labor market
a. all firms are wage takers b. all firms are wage searchers c. all firms sell their output at a constant price d. none of the firms that demand labor can be monopolists e. some firms may be able to influence the wage rate as long as most firms cannot