Products such as office supplies are examples of
A. simple goods.
B. search goods.
C. experience goods.
D. selective goods.
Answer: B
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If Y = $200 billion, c = 0.75, autonomous consumption = $10 billion, and T = $20 billion, induced consumption expenditure is
A) $135 billion. B) $200 billion. C) $180 billion. D) $150 billion.
Pluralistic ignorance exists when
A) the members of a group believe one thing but mistakenly assume that most of the other members believe something else. B) a group of bystanders all agree that something needs to be done but each feels less personal responsibility for taking action because each perceives that there are others who could take action. C) a majority of people in a group do not have the intellectual capacity of arriving at a viable solution to a public goods problem. D) the least-capable member of a group exerts his influence over the rest of the group when trying to arrive at a decision on how to internalize an externality.
The larger the fraction of an investment financed by borrowing
A) the greater the potential return and the smaller the potential loss on that investment. B) the smaller the potential return and potential loss on that investment. C) the greater the potential return and potential loss on that investment. D) the smaller the potential return and the greater the potential loss on that investment.
In order to minimize deadweight loss generated by taxation, a tax should be placed on goods that are:
A. price elastic. B. price inelastic. C. expensive. D. popular.