Explain what the slope of the income consumption curve shows about the income elasticity of demand
What will be an ideal response?
A positive slope of the income consumption curve is associated with a positive income elasticity of demand, and a negatively sloped income consumption curve is associated with a negative income elasticity of demand. The income consumption curve represents how consumption changes with an increase in income. An upward-sloping income consumption curve represents an increase in consumption as income rises, as does a positive income elasticity.
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When a tariff is imposed on a good, domestic consumers of the good ________ and domestic producers of the good ________
A) win; win B) lose; win C) lose; neither win nor lose D) lose; lose E) win; lose
A production possibilities curve has "good X" on the horizontal axis and "good Y" on the vertical axis. On this diagram, the opportunity cost of good X, in terms of good Y, is represented by the:
a. distance to the curve from the horizontal axis. b. distance to the curve from the vertical axis. c. distance from the origin to the curve. d. change in Y for each change in X along the curve.
The longest and most severe recession in the United States since 1925 began in:
A. 1929. B. 1957. C. 1945. D. 1982.
An explanation for the low saving rate in the United States consistent with the precautionary reason for saving includes:
A. highly-developed financial systems making it easy to buy homes with down payments under 15 percent. B. relatively generous government assistance for the elderly and large down payments required for home purchases. C. confidence in future economic prosperity. D. households spending beyond their means to keep up with community standards.