Easterlin (1968, 1987) argues that as the relative price of children rises,
(a) the average household demands fewer of them.
(b) society, at large, demands fewer of them.
(c) society, at large, demands more of them.
(d) nothing happens since the demand for children is not influenced by price.
(a)
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A country with a real GDP per person similar to real GDP per person in the United States but with limited political freedom is generally considered to have
A) a lower standard of living than the United States. B) a larger Human Development Index because the other country still needs to develop more political freedom. C) the same standard of living as the United States. D) an understated GDP. E) an overstated nominal GDP.
The accountant's definition of profits, or the definition used for tax purposes, is not wholly satisfactory from the economist's point of view because
A) accountants are paid by business firms and consequently tend to exaggerate the size of profits. B) accountants deal with empirical data while economists are interested in theoretical explanations. C) accountants tend to minimize profits in order to avoid the payment of unnecessary taxes. D) accounting costs do not include the entrepreneur's opportunity costs.