If the marginal propensity to consume = 0.75, then:
A. the marginal propensity to save = 0.75.
B. the marginal propensity to save = 1.33.
C. the marginal propensity to save = 0.20.
D. the marginal propensity to save = 0.25.
Answer: D
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Which of the following would likely cause the greatest deadweight loss?
a. a tax on cigarettes b. a tax on salt c. a tax on cruise line tickets d. a tax on gasoline
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.
Consumers do not prefer gifts-in-kind to cash gifts
Indicate whether the statement is true or false
The income that measures a household's earnings in the absence of government redistribution is called
A) market income. B) real income. C) money income. D) cash income.