How much people plan to consume at various levels of disposable income is known as
A. dissaving.
B. the consumption function.
C. investment.
D. aggregate demand.
Answer: B
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Joe consumes pizza and movies. He is currently spending his entire income and his marginal utility of pizza is 10 and his marginal utility of movies is 5
If the price of a pizza is $10 and the price of a movie is $5, then to maximize his utility Joe should A) increase consumption of pizza and decrease consumption of movies. B) increase consumption of movies and decrease consumption of pizza. C) not change his current bundle of movies and pizza. D) increase consumption of both goods.
Suppose a tax of $3 is imposed on each new garden hose that is sold, resulting in a deadweight loss of $22,500 . The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. Before the tax was imposed, the equilibrium quantity of garden hoses was 100,000 . We can conclude that the equilibrium quantity of garden hoses after the tax
is imposed is a. 75,000. b. 85,000. c. 90,000. d. 95,000.
An effective price floor
A. Occurs when market prices are below equilibrium prices. B. Results in a shortage. C. Results in a surplus. D. Can occur due to collusion.
A positive externality exists when the actions of one party impose benefits on a second party.
Answer the following statement true (T) or false (F)