Which of the following might cause the demand curve for an inferior good to shift to the left?
a. a decrease in income
b. an increase in the price of a substitute
c. an increase in the price of a complement
d. None of the above is correct.
c
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Suppose an individual faces a decision of whether or not to make an investment 2 years from now. The investment will cost $10,125, and it will yield a benefit b 2 years later. a. Suppose the individual treats a dollar 1 year from now the same way as $0.90 now. How low can b be for this individual to plan to make the investment in two years?
b. Now suppose that the individual's tastes are better characterized by the beta-delta model. Suppose delta is 0.9. For what values of beta will the individual plan the same course of action 2 years from now as he would in the typical delta model (with the same delta)? c. Suppose beta is 0.9 (with delta also equal to 0.9). How low can b be in order for the individual to be willing to undertake the investment when he faces the choice in 2 years? d. For what range of values for b does the individual from (c) plan to undertake the investment but then decides not to when the time comes? What will be an ideal response?
Modern economists measure how much utility Fred gets from a hot dog by
A. asking Fred how many utils he gets from its consumption. B. examining the price of the hamburger Fred chose not to buy. C. asking Fred how much of some other good he would give up to get the hot dog. The “other good” can be any good except money. D. asking Fred how much of some other good he would give up to get the hot dog. The “other good” can be any good, including money.
Reduction or elimination of dividend taxes is designed, in part, to
A) reduce the double taxation burden on individuals. B) make rich people richer. C) reduce inefficiencies in the production process. D) increase corporate tax levels.
Theoretically, the market demand for a public good is found by
a. vertically addingthe MEC and MPCfunctions b. overcomingfree-ridership and vertically summingthe price responses for each quantity c. adding horizontally the marginal benefits received by each consumer at every price level d. summing the quantities each person is willing and able to buy at each and every price