The national income and consumption data for the United States over the time period 1970–91 creates a consumption curve that runs through the origin. This differs from the consumption curve depicted by Keynes or by Duesenberry (MPC falling or remaining constant as income increases) which shows the curve beginning above the origin. The explanation is that
a. the consumption curve reflecting the data is a short-run consumption function
b. the consumption curve reflecting the data is only meant to be an approximation to the reality of the Keynesian and Duesenberryian curves
c. the Keynesian or Duesenberryian consumption curves are long-run consumption functions
d. the consumption curve reflecting the data is a long-run consumption function
e. autonomous consumption in the United States is equal to $0
D
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The marginal cost to the phone company of handling a long distance call is likely to be
A) higher the fewer such calls people make. B) higher the more the phone company has invested in equipment. C) substantially less than the price charged for the call. D) substantially more than the price charged for the call.
If the price of a good has risen over time,
a. it must have become more scarce. b. it must have become less scarce. c. it has become more scarce only if the price adjusted for inflation has risen. d. it has become less scarce only if the price adjusted for inflation has risen.
If a government imposed price ceiling legally sets the price of beef below market equilibrium, which of the following will most likely happen?
A. The quantity of beef demanded will decrease. B. The quantity of beef supplied will increase. C. There will be a surplus of beef. D. There will be a shortage of beef.
Why can't the government force a natural monopolist to produce the competitive output?
What will be an ideal response?