A firm's utility bill is a variable cost. If the cost of utilities increases, then in the figure above ________ upward
A) only curve A shifts
B) only curve B shifts
C) only curve C shifts
D) both curves A and C shift
E) both curves B and C shift
E
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If the price elasticity of demand is 0.5, this means that a ________ increase in price causes a ________ decrease in quantity demanded.
A. 20%; 100% B. 30%; 15% C. 20%; 1% D. 5%; 1%
The marginal propensity to consume (mpc) can be defined as the fraction of
A) a change in income that is spent. B) a change in income that is saved. C) income that is spent. D) income that is saved.
Which of the following statements is true for markets in which the demand curve slopes downward and the supply curve slopes upward?
a. As the size of the tax increases, tax revenue continually rises and deadweight loss continually falls. b. As the size of the tax increases, tax revenue and deadweight loss rise initially, but both eventually begin to fall. c. As the size of the tax increases, tax revenue rises initially, but it eventually begins to fall; deadweight loss continually rises. d. As the size of the tax increases, tax revenue rises initially, but it eventually begins to fall; deadweight loss falls initially, but eventually it begins to rise.
Mark spends his weekly income on gin and cocktail olives. The price of gin has risen from $7 to $9 per bottle, the price of cocktail olives has fallen from $6 to $5 per jar, and Mark's income has stayed fixed at $46 per week. If you measure gin on the vertical axis and cocktail olives on the horizontal axis, then the budget constraint
a. is steeper after the price changes. b. is flatter after the price changes. c. is the same after the price changes. d. shifts in a parallel fashion to the old budget constraint after the price changes.