Describe the consumption schedule.
What will be an ideal response?
The consumption schedule shows the relationship between the consumption and disposable income. Graphically this relationship is illustrated with consumption measured on the vertical axis and disposable income measured on the horizontal axis. If the two were equal, the relationship would follow a straight line along the 45-degree line. However, historical data suggest that it is a direct relationship, and that households spend a larger proportion of a small income than of a large disposable income. In other words, consumption falls as a proportion of income as disposable income increases.
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Profit-maximizing level of output
A. is OR.
B. is OS.
C. is OT.
D. None of the choices are correct.
A short-run change in ________ is referred to as a business cycle
A) the currency exchange rate B) the expenditure incurred by the government C) the aggregate price level D) the growth rate of output
One of the primary aims of taxation is:
A. to increase government revenues. B. to reduce the equilibrium quantity. C. to alter the incentives of market participants. D. All of these are primary goals of taxation.
Adverse selection can occur if:
a. high-risk persons insure themselves more heavily than low-risk persons. b. high-risk persons claim coverage which cannot be borne by the insurers. c. high-risk persons do not conceal information from the insurer. d. high-risk persons make an effort to take less risk in the presence of an insurance cover.