A decrease in the price level will most likely have what effect on the consumption function?
a. It will shift upward.
b. It will shift downward.
c. It will cause movement downward along the function.
d. It will cause movement upward along the function.
a
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Evaluate the following statement: "Water is plentiful, therefore it can't be a scarce resource like oil which is not as plentiful."
What will be an ideal response?
The marginal social benefit is the sum of the benefit enjoyed by the consumer of an additional unit of a good or service plus the marginal benefit enjoyed by others
Indicate whether the statement is true or false
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. Suppose the government imposes a $2.00 per gallon tax on milk. The supply function for milk becomes:
A. Qsm = 4Pm - 6. B. Qsm = 6Pm - 6. C. Qsm = 6Pm - 20. D. Qsm = 6Pm - 10.
If a bank receives a new checkable deposit of $10,000 . and the required reserve ratio is 20 percent, then the bank can lend out:
a. $2,000. b. $10,000. c. $40,000. d. $8,000. e. $0.