At the point where the consumption function crosses the 45-degree line:
a. consumption is equal to disposable income, and therefore, saving is zero.
b. consumption is less than income, and saving is present.
c. consumption is greater than income, and dissaving is present.
d. planned saving equals actual saving minus disposable income.
a
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Optimal decisions are made at the point where marginal benefit is maximized
Indicate whether the statement is true or false
Excise taxes are distortionary taxes.
A. True B. False C. Uncertain
Many people leave their servers tips in restaurants, even when they are not likely to visit the restaurant again. This is evidence that
A) people would rather pay for good service at an inexpensive restaurant than pay higher prices and receive poor service at an expensive restaurant. B) people treat others fairly even if doing so makes them worse off financially. C) there has been an improvement in the service people receive in restaurants over time, partly because the restaurant industry has become more competitive. D) people enjoy eating at restaurants more than eating at home.
The ability of an individual, firm, or country to produce more of a certain good than other competing producers, given the same amount of resources, is referred to as:
A) marginal advantage. B) comparative disadvantage. C) absolute advantage. D) perfect advantage.