Consumption spending that is independent of the level of disposable income is known as:
a. marginal consumption.
b. transitory consumption.
c. permanent consumption.
d. relative consumption.
e. autonomous consumption.
e
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"Scarcity implies that some way of rationing goods must be found." Explain what this statement means. How is this rationing done?
What will be an ideal response?
Which of the following describes a situation in which demand must be elastic?
a. The price of pens rises by 10 cents, and quantity of pens demanded falls by 50. b. The price of pens rises by 10 cents, and total revenue rises. c. A 20 percent increase in the price of pens leads to a 20 percent decrease in the quantity of pens demanded. d. Total revenue does not change when the price of pens rises. e. Total revenue decreases when the price of pencils rises.
If the reserve ratio is 100 percent, the value of the monetary multiplier is:
A. 1. B. 100. C. 10. D. 0.
For perfectly competitive firms, marginal revenue ________ price; for monopolists marginal revenue ________ price.
A. equals; is less than B. equals; equals C. equals; is greater than D. is less than; equals