According to Friedman, people behave differently with respect to the different kinds of incomes they earn. For example, the MPC in 2002 is associated with their _________ income earned in 2000 . The difference between the income earned in 2001, and that income in 2002 is called ___________ income
a. relative; absolute
b. absolute; relative
c. permanent; transitory
d. transitory; permanent
e. transitory; transitory
C
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? Assume that Figure 4-4 shows demand for steak. An increase in income of buyers will change demand from
A. D1to D2. B. D2to D1. C. D3to D2. D. D3to D1.
The tolerance of bribe-taking by government officials
A) reduces economic uncertainty because all investors are aware of the practice. B) reduces economic efficiency because rules governing property rights are not regularly enforced. C) reduces government expenditures because public employees can be paid less. D) reduces the need for government to impose taxes on poor people.
Utility is:
A. maximized by rational individuals. B. revealed by observing choices an individual makes. C. the satisfaction individuals get from different bundles of goods. D. All of these are true.
In a coordination game, a Nash equilibrium occurs when
a. each player ignores the strategy of the other player b. each player chooses no strategy, but maintains the status quo c. each player chooses the same strategy d. one player can improve the outcome by changing strategy e. None of the answers is correct.