The fraction of each added dollar of income that is used for consumption is called the:
a. average propensity to consumer (APC).
b. autonomous consumption rate (ACR).
c. marginal consumption propensity (MCP).
d. marginal propensity to consume (MPC).
d
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Suppose milk and chocolate syrup are complements (mixed together they make chocolate milk). If the price of milk increased by exactly 25%, the economic way of thinking suggests
A) the demand for milk would decrease. B) the demand for chocolate syrup would decrease. C) the demand for milk would decrease by exactly 25%. D) the demand for chocolate syrup would decrease by exactly 25%.
Decreasing returns to scale and diminishing returns differ in that
a. Diminishing returns is a long-run concept while decreasing returns to scale is a short-run concept. b. Diminishing returns is a short-run concept while decreasing returns to scale is a long-run concept. c. Diminishing returns is a both short and long-run concept while decreasing returns to scale is a short-run concept. d. Diminishing returns is a long-run concept while decreasing returns to scale is a short and long-run concept.
Which of the following activities describes the opportunity cost of attending an economics class?
a. the value of the time it takes to get to campus every day b. the cost of the gasoline needed to drive a car to campus c. the value of the highest valued alternative that must be forgone because of attending the class d. transportation costs plus the cost of tuition and textbooks for the course
Suppose the price of a bag of tortilla chips decreases from $3.00 to $2.50 and, as a result, the quantity of tortilla chips demanded increases from 200 bags to 300 bags. Using the midpoint method, the price elasticity of demand for tortilla chips in the given price range is
a. 0.33. b. 0.45. c. 2.20. d. 3.00.