The slope of the consumption schedule between two points on the schedule is:
A. The ratio of the change in consumption to the change in disposable income between those two points
B. The ratio of the change in disposable income over the change in consumption between
those two points
C. Equivalent to one plus the marginal propensity to save
D. Equivalent to the average propensity to consume
A. The ratio of the change in consumption to the change in disposable income between those two points
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Refer to Scenario 8.2. The result of the tax in the long run will be that
A) Q falls from 30,000; P rises by less than $20,000. B) Q falls from 30,000; P rises by $20,000. C) Q falls from 30,000; P does not change. D) Q stays at 30,000; P rises by $20,000. E) Q stays at 30,000; P rises by less than $20,000.
A quota is a
a. tax on a specific quantity of imported goods b. limited number of foreign firms that can sell imported goods c. restrictive health and safety standard that raises costs d. tax on domestic producers so that they can make higher profits e. limit on the quantity of a good that can be imported
Distinguish macroeconomics and microeconomics.
What will be an ideal response?
The demand for normal goods follows the law of demand because of
A. risk-aversion by consumers. B. the income effect only. C. the substitution effect only. D. both the substitution and income effects.