Consumer income changes can shift market demand
a. True
b. False
Indicate whether the statement is true or false
True
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If for any given inflation rate, the federal government lowered taxes, ________
A) it would have a similar qualitative result on output as an increase in government purchases B) it would raise disposable income leading to higher consumption spending C) the aggregate demand curve would shift to the right D) all of the above E) none of the above
In the indifference curve-budget line model of labor supply, the vertical intercept of the budget line represents
a. the worker's nonlabor income. b. the wage rate paid to the worker. c. the number of leisure hours enjoyed by the worker. d. the number of hours of labor that the worker supplies.
Suppose Billy runs a baseball team but has far less money to pay players than other teams. So he figures out how to find overlooked players who are worth more than other teams realize. Billy pays these players less than other teams would be willing to pay if they knew how good they were. As a result, Billy’s team wins a lot of games without spending much on players. Which of the following is likely not true?
A. Billy’s rent will equal the payroll costs of other teams with a similar number of wins less his payroll costs. B. Billy’s rent will equal his payroll costs less the payroll costs of other teams with a similar number of wins. C. When rich teams realize how valuable these players are, they compete for the rent Billy is receiving by offering higher pay. D. When rich and poor teams realize how valuable the players Billy finds are, they compete for the rent Billy is receiving by copying his methods for evaluating players.
An individual is endowed with $100 of income in period 1, and will receive an income of 121 in period 2. The interest rate is 10%, and there are only 2 periods. The maximum second period consumption is
a) 100 b) 121 c) 221 d) 231 e) 233.1