Bottles of Coca-Cola and equally-sized bottles of Pepsi Cola are perfect substitutes for a consumer, but a bottle of Coke costs 10 cents less than bottles of Pepsi. The income effect of a 15 cent increase in the price of Pepsi will be for the consumer to drink less cola.
Answer the following statement true (T) or false (F)
False
Rationale: The consumer is at a corners solution -- consuming only Coke -- before the price of Pepsi increases. The increase in the price of Pepsi therefore has no impact on the consumer.
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The Social Security tax is considered to be a
A) regressive tax. B) progressive tax. C) proportional tax. D) marginal tax.
_____ are changes in fiscal policy that stimulate aggregate demand when the economy goes into recession without policymakers having to take any deliberate action
Fill in the blank(s) with correct word
The government tries to protect the competitive economic system by passing and enforcing
A) price controls. B) tariff legislation. C) antitrust laws. D) building codes and zoning laws.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, which point cannot be produced with the current state of technology?
A. A B. B C. C D. F