If consumers receive an increase in income of $1,000, their spending will increase by a smaller amount.
Answer the following statement true (T) or false (F)
True
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Policy B will be judged to be better than another by the Pareto criterion when
a. Policy B is preferred unanimously. b. Policy B would win a majority of votes. c. there is no deadweight loss associated with Policy B. d. any fair minded person would recognize that Policy B is fair and equitable.
A point inside a production possibilities curve reflects
a. the law of increasing costs b. technological innovation c. less than full use of resources and technology d. economic efficiency e. a way to increase future economic growth
If fears of a terrorist attack are widespread and people lose faith in money, the economy could revert to a system of
a. cash and checks. b. double-entry bookkeeping. c. barter. d. financial intermediaries.
Exhibit 6A-6 Consumer equilibrium
?
As shown in Exhibit 6A-6, the marginal rate of substitution (MRS) at point X is ____ the marginal rate of substitution at point Y.
A. less than B. greater than C. equal to D. twice