When income increases the slope of an individual's demand curve, the demand curve
a. turns positive.
b. becomes undefined.
c. remains negative.
d. becomes infinite.
c
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A consumer purchases housing (H) and spends the remainder of income on the composite good (C). The government is considering one of two policies. Policy A taxes housing by $50 per unit consumed
With the tax in place, the consumer purchases 100 units of housing. Policy B collects a lump-sum tax of $5,000 from the consumer's income. Compare the effects of the policies on the consumer's utility/well-being and the amount of housing and composite goods purchased.
Concerning the effect of New Deal farm measures, Walton and Rockoff conclude that the New Deal _____
a. simply failed to help farmers because the farmer's terms of trade did not improve. b. helped the farmer to a limited extent primarily through the stimulation of aggregate demand. c. helped the farmer to a substantial extent by limiting farm output. d. helped the farmer to a substantial extent by increasing farm output.
One difference between moral hazard and adverse selection is
a. Adverse selection has to do with unobservable characteristics of individuals b. Moral hazard has to do with unobservable actions of individuals c. Adverse selection is individuals change their behaviors because of a contract d. Only A&B
If the Fed wants to raise interest rates, then it can use its open market operations to:
A. increase the money supply. B. decrease the money supply. C. increase money demand. D. decrease money demand.