The Slutsky equation is a mathematical representation of:
A) a utility function.
B) the marginal utility of income.
C) a demand curve.
D) the income expansion path.
E) the substitution and income effects.
E
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A subsidy may be used as a corrective device in the case of a positive externality because it will __________ marginal private benefits and __________ demand.
A. increase; decrease B. increase; increase C. decrease; decrease D. decrease; increase
The four-firm concentration ratio
A) indicates the total profitability among the top four firms in an industry. B) is an indicator of the degree of monopolistic competition. C) indicates the presence and intensity of an oligopoly market. D) is used by the government as a basis for anti-trust cases.
Who among the following is a free rider? a. Butch breeds the feared pit bulls, and his neighbors now erect fences around their property
b. Fred watches many public television programs, but he has never sent in a contribution. c. Barry steals candy from the store where he works. d. Betty regularly uses the local public library. e. Joe drives 20,000 miles a year on public streets, but he pays no more in taxes than Sam, who only drives 1,000 miles.
Considering only its direct effect on income, contractionary fiscal policy tends to:
A. decrease income and imports, raising the trade deficit. B. decrease income and imports, lowering the trade deficit. C. increase income and imports, lowering the trade deficit. D. increase income and imports, raising the trade deficit.