Contrast the good-citizen model with the economic model to explain the reason why people engage in charitable behavior.
What will be an ideal response?
The good-citizen model views charitable behavior as the result of individuals placing the good of society ahead of their own well-being. The model assumes that if individuals knew how best to improve society they would choose to help others. The economic model holds that people engage in charitable behavior as part of their utility maximization, given constraints. In contrast to the good-citizen model, the economic model successfully predicts that charitable donations respond to changes in the cost of charitable donations created by changes in the tax code.
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If credit card usage exhibits a sharp increase, there is
A) an upward movement along the demand for money curve. B) a rightward shift of the demand for money curve. C) a leftward shift of the demand for money curve. D) a downward movement along the demand for money curve. E) a leftward shift of the supply of money curve.
Restrictive covenants place constraints on the behavior of ________
A) borrowers B) lenders C) the central bank D) the executive branch of the federal government
The opportunity cost of holding money balances increases when:
a. the inflation rate decreases. b. the interest rate increases. c. the interest rate decreases. d. GDP is far from full employment.
With linear demand and supply curves in a market, suppose a tax of $0.20 per unit on a good creates a deadweight loss of $40 . If the tax is increased to $0.50 per unit, the deadweight loss from the new tax will be
a. $200. b. $250. c. $475. d. $625.