If the income line lies below the consumption curve, then whatever the level of national income, saving
a. equals consumption
b. equals income
c. is less than zero
d. is equal to zero
e. is greater than zero
C
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Engel's law suggests that as income rises, the demand for food
a. rises less than proportionately b. rises more than proportionately c. rises proportionately d. falls e. none of the above
Which of the following are implicit costs for a typical firm?
a. insurance costs b. electricity costs c. opportunity costs of capital owned and used by the firm d. cost of labor hired by the firm e. the cost of raw materials
The net increase to total surplus when a negative externality is corrected or eliminated is due to:
A. the transfer of surplus from consumer or producer to those affected by the externality. B. the transfer of surplus from those affected by the externality to the consumer. C. the reduced number of transactions in the market. D. None of these statements is true.
The hiring rule for the perfect competitor in the labor market is to choose that amount of labor for which the wage rate is exactly equal to
A. marginal revenue from the sale of one more unit of output. B. MC. C. the cost of capital. D. the value of the marginal product of labor, VMPL.