Income elasticity of demand is expected to be _____
a. relatively high for necessities
b. positive for most products
c. relatively low for luxuries
d. negative for most products
e. zero for most products
b
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If you have a checking account at First National Bank, the account is
A) an asset to both you and First National. B) a liability to both you and First National. C) an asset to First National and a liability to you. D) an asset to you and a liability to First National.
If the marginal propensity to consume (MPC) is 0.80, the value of the spending multiplier is:
a. 2. b. 5. c. 8. d. 10.
When property rights are not well established,
a. private goods become public goods. b. markets fail to allocate resources efficiently. c. the distribution of private goods is unfair. d. government resources are used inefficiently.
Suppose that Kara values a hot fudge sundae at $6 and Stacia values one at $5 . The pretax price of a hot fudge sundae is $3 . The government imposes a $1 tax on hot fudge sundaes, which raises the price to $4 . What is the deadweight loss from the tax?