Which of the following best explains why the line for disposable income is vertical?
a. An increase in real wealth raises consumption spending.
b. Disposable income is being held constant to examine autonomous factors.
c. As household debt increases, consumption spending falls.
d. Not all income is used to buy goods and services; some is saved or taxed away.
b. Disposable income is being held constant to examine autonomous factors.
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Black-market prices are below equilibrium prices because sellers want to sell large quantities.
Answer the following statement true (T) or false (F)
Which of the following holds true in a market when the invisible hand functions properly?
a. MC = MU = P b. P = MRS c. P = MC but not P = MU d. P = MU but not P = MC
The cost/benefit approach that economists agree on requires an economist to determine a quantitative cost and benefit for:
A. only tangible items. B. everything, including life but not potential lives. C. everything, including life. D. everything but life.
In terms of median family income,
A. black families earn about 85% of what white families earn. B. black families earn about 61% of what white families earn. C. black families earn about 44% of what white families earn. D. black families earn about the same as whites.