In the above figure, when disposable income is greater than 600
A) saving is negative.
B) the MPC is greater than 1.
C) saving is positive.
D) the MPS is negative.
C
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Economists use models in order to
A. get around having to deal with actual facts. B. understand real-life events and predict outcomes. C. avoid having to use theories to understand economic conditions. D. help elect political candidates.
Use the law of diminishing marginal utility to explain why a pizza parlor might price pizzas in the following way: "Buy one pizza for $12, get the second pizza for $6." Why not simply charge $9 per pizza instead?
We use the term expansionary fiscal policy when the overall effect of decisions about taxation and spending is to:
A. increase aggregate demand. B. decrease aggregate demand. C. increase aggregate supply. D. decrease aggregate supply.
By referencing events in the news or something from your personal experiences, describe one example of each of the five foundations of economics discussed in this chapter.
Five Foundations of Economics: Incentives Trade-offs Opportunity cost Marginal thinking The principle that trade creates value