Explain the difference between a movement along the consumption schedule and a shift in the consumption schedule.
What will be an ideal response?
A movement from one point to another on the consumption schedule is a change in the amount consumed. It is caused solely by a change in disposable income. By contrast, a shift in the consumption schedule is the result of a change in one of the non income determinates of consumption such as a change in wealth, expectations, taxation, or household borrowing. If a household decided to consume more at each level of disposable income, the consumption schedule will shift upward.
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An option allowing the owner to sell an asset at a future date is a
A) put option. B) call option. C) futures contract. D) forward contract.
Which of the following would be most likely to contribute to the breakdown of a cartel in a natural resource (e.g., bauxite) market?
a. high prices b. low price elasticity of demand c. high compatibility of member interests d. unequal member ownership of the natural resource
A commercial bank lists
A. loans as liabilities. B. required reserves as liabilities. C. deposits as liabilities. D. excess reserves as liabilities.
Linda fishes for mahi mahi at a cost of $10 per ton, while Tessa fishes at a cost of $8 per ton. Both have one 1000 ITQ and the current market price is $13 per ton. If Linda sold her ITQ to Tessa for $3000, she and Tessa would:
A. Make the sale because they're both better off B. Not make the sale because Linda is better off and Tessa is not C. Not make the sale because Tessa is better of and Linda is not D. Not make the sale because neither is better off