How does the substitution effect work when the price of item increases?
A. The item becomes less and less popular as price drops
B. Consumers buy the cheaper item B as a substitute for item A
C. Consumers buy item A even if they do not particularly want it
D. The substitutes for item A also increase in price
Answer: B. Consumers buy the cheaper item B as a substitute for item A
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A taxcredit fora clean fuel vehicle
a. acts as a subsidy to encourage consumption, by increasing the MPB b. can be modeled as a shift up of the MEB c. is represented as a shift down of the MPB by the amount of the tax credit d. raises the effective price of the vehicle, discouraging consumption
Suppose the price of a ticket to a Lenny Kravitz concert is $41 and at that price, the quantity of tickets demanded is 17,000 per concert
Using the midpoint method of calculating percentage changes, if Mr. Kravitz raises the price to $48 and the quantity demanded decreases to 16,000, the price elasticity of demand for his concert tickets is A) 15.73. B) 6.06. C) 1.00. D) 0.39. E) 0.93.
An income tax system in which the average tax rate decreases with the level of income is called a
A) progressive income tax system. B) proportional income tax system. C) regressive income tax system. D) flat-rate income tax system.
The HPAE focused their education spending on the university level to better develop high technology workers
Indicate whether the statement is true or false