After Joyce and Larry purchased their first house, they made additional home improvements in response to increases in income. After a while, their income rose so much that they could afford a larger home. Once they realized they would be moving, they reduced the amount of home improvements. Their Engel curve for home improvements on their current home is
A) negatively sloped.
B) flat.
C) positively sloped.
D) backward bending.
D
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Refer to Figure 4-1. If the market price is $2.50, what is Kendra's consumer surplus?
A) $9.00 B) $7.50 C) $1.50 D) $0
What are the three basic conditions necessary for price discrimination?
Regulatory capture exists when
A. regulated firms form special interests and influence politicians who appoint regulators through campaign donations. B. regulated firms pay for favorable public media campaigns. C. the federal government successfully deregulates an industry. D. two or more firms merge to gain a majority market share.
A bank creates money when it:
A. gets new checkable deposits which the depositor formerly held as cash. B. has a loan paid off, which creates excess reserves for the bank. C. makes a loan from its excess reserves. D. holds back excess reserves because of an increase in the required reserve ratio.