The average propensity to consume is the
A. rate at which real disposable income changes as autonomous consumption changes.
B. ratio of changes in planned consumption to changes in real disposable income.
C. slope of the consumption function.
D. percentage of total disposable income consumed.
Answer: D
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In the above figure, Reggie's budget line rotates outward from BL1 to BL2. He initially consumes at point A. If his new consumption bundle is at point B, this implies that kiwi fruit and mangoes are
A) both lower in price. B) both inferior goods. C) neither substitutes nor complements. D) None of the above answers is correct.
Suppose Mara and David compete, selling fried green tomatoes in a perfectly competitive market. If Mara increases output,
a. David must reduce output b. the price David can charge falls c. the price David can charge rises d. the price David can charge is unaffected e. David's economic profit must fall
An individual should continue to spend time searching for a job as long as
a. all salary offers are below what the person expected. b. the marginal benefit expected from additional search exceeds the marginal cost. c. job openings are available in the individual's field. d. information is available that the individual has not yet collected.
The supply of both physical and human resources in the long run is determined primarily by
a. the presence or absence of economies of scale. b. investment choices and resource depreciation. c. sunk costs; what happens in the present cannot change the future. d. the law of diminishing marginal returns.