"Men are disposed, as a rule, and on the average, to increase their consumption as their income increases, but not by as much as the increase in their incomes." Which of the following is consistent with this statement by J.M. Keynes?
a. The slope of the consumption function is positive and less than one.
b. The slope of the consumption function is greater than that of the 45-degree line.
c. The slope of the consumption function is negative.
d. The slope of the consumption function is equal to one.
a
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Any factor that reduces resource availability causes
a. the aggregate demand curve to shift to the right b. the aggregate demand curve to shift to the left c. the aggregate supply curve to shift to the right d. the aggregate supply curve to shift to the left e. a movement to the left along the existing aggregate supply curve
Choosing to study for an exam until the extra benefit (e.g., improved score) equals the extra cost (e.g., the value of foregone activities) is:
A. an application of the Cost-Benefit Principle. B. not rational because it ignores the importance of total benefits and total costs. C. not an economic choice. D. an application of the Scarcity Principle.
Which type of resource will improve through more education and training by workers?
A. physical capital B. human capital C. natural resources D. money
An interior solution to a consumer's utility maximization problem implies
A) consuming a positive amount of all goods. B) consuming negative amounts of all goods. C) consuming less than optimal amounts of all goods. D) consuming more than an optimal amount of at least one good.