A consumer spends his income on food and rent. The government places a $1 tax on food. To restore the pre-tax consumption level of food the rebate paid to consumers will be smallest when
A) the own price elasticity of demand for food is 2, and the income elasticity of demand for food is 5.
B) the own price elasticity of demand for food is 5, and the income elasticity of demand for food is 5.
C) the own price elasticity of demand for food is 2, and the income elasticity of demand for food is 10.
D) the own price elasticity of demand for food is 5, and the income elasticity of demand for food is 10.
C
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Data on output and aggregate expenditure in Macroland are given in the table below.Real GDP (Y)Aggregate Expenditure (AE)2,0002,3003,0003,2004,0004,1005,0005,0006,0005,900Based on these data, the equilibrium level of output is
A. $32,000. B. $4,100. C. $20,000. D. $5,000.
When a society achieves production efficiency, it is
A) definitely producing at a point on its PPF. B) perhaps producing at a point on its PPF and perhaps producing at a point inside its PPF. C) definitely producing that combination of goods and services that society values most highly. D) not fully employing all of its available resources to produce goods and services. E) enjoying a free lunch.
Inflation impairs money's ability to do its job as a ______.
Fill in the blank(s) with the appropriate word(s).
A farmer can grow either apples or oranges. An increase in the price of apples ______ the opportunity cost of growing oranges so that the supply curve of oranges shifts ______.
Fill in the blank(s) with the appropriate word(s).