Which of the following changes in disposable income would lead to the greatest increase in consumption?
a. a $20,000 increase in disposable income, if MPC equals 0.5
b. a $12,000 increase in disposable income, if MPC equals 0.75
c. a $15,000 increase in disposable income, if MPC equals 0.6
d. a $30,000 increase in disposable income, if MPC equals 0.25
a
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What happens as the result of a shortage?
A) There is downward pressure on prices. B) There is upward pressure on prices. C) Consumers begin to view the good as an inferior good because they have a hard time finding it. D) Supply of the good decreases.
GDP measures the economy's production of:
a. final goods and services. b. intermediate goods. c. consumer goods and services. d. capital goods.
The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place
a. True b. False Indicate whether the statement is true or false
High price and low total utility indicate
A. low marginal utility. B. large quantities are sold. C. high marginal utility. D. a high price/marginal utility ratio.