The income and substitution effects account for:
A. the upward-sloping supply curve.
B. the downward-sloping demand curve.
C. movements along a given supply curve.
D. shifts in the demand curve.
Answer: B
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Suppose two neighbors share a park. One neighbor, Al, leaves trash in the park. This bothers the other neighbor, Bert. According to Coase's theorem, the optimal level of trash in the park can be achieved if
A) Al is fined by the government. B) Al has the right to leave trash and Bert cannot do anything about it. C) Al has the right to leave trash and Bert can pay him to limit his dumping. D) Bert moves.
If Hector's marginal rate of substitution between pens and pencils is constant, regardless of how many pens and pencils he has, then his indifference curves
a. are right angles. b. are straight lines. c. slope upward. d. cross one another at certain points.
Given the following data, what is the distance from the origin to the point where the total expenditures (TE) curve cuts the vertical axis? C = $800 + 0.85Yd I = $350 G = $420
A) $1,570 B) $1,150 C) $1,220 D) $770 E) ?$1,220.85
The difference between a country's purchases of foreign assets minus foreign purchases of the country's assets during a period of time is
A. net foreign investment. B. net domestic investment. C. net foreign surplus. D. net official reserves.