If Y = C + Ii, C = 100 + .80Y, Ii = 100, the equilibrium level of income is
a. $200
b. $400
c. $600
d. $800
e. $1,000
E
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A consumer has $1,000 a week to spend on renting square feet of housing x1 (at a price of $5 per square foot) and eating out meals x2 (at a price of $20 per meal). Derive the budget line equation and find the opportunity cost of housing in terms of meals in your equation.
What will be an ideal response?
Compare and contrast the two normative standards to income distribution discussed in the text: The productivity standard and the egalitarian principle
What will be an ideal response?
When interest rates go up, people are
a. more likely to borrow b. less likely to borrow c. does not affect a person's consumption d. None of the above
Which of the following decreases supply in the market for pizza?
a. Pizza shop employees successfully organize a union and negotiate a pay increase. b. Cheese prices drop because price supports for dairy farmers are removed. c. Suppose that some hot sandwich shops can also produce pizzas, and consumer demand for hot sandwiches declines sharply, reducing the profitability of producing hot sandwiches. d. The Surgeon General announces that eating pizza reduces the incidence of stomach cancer.