How do you interpret the value of income elasticity?
What will be an ideal response?
If income elasticity is negative, a good is inferior, while if income elasticity is positive a good is normal.
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Using real GDP on the horizontal axis instead of real disposable income implies that a marginal propensity to consume 0.75 generates for every additional $100 of real GDP
A) $25 of additional saving. B) $56.25 of additional consumption spending. C) $25 of additional saving and taxes. D) $75 of additional real disposable income.
In the macroeconomic model of aggregate supply and aggregate demand, quantity is:
A. represented by GDP. B. the measure of the value of all goods and services produced by the economy. C. a measure of total output. D. All of these are true.
If people voluntarily bring their recyclable materials to a recycling center, these materials reduce landfill space, reduce the need for virgin material extraction, and provide an inexpensive input in many production processes. This results in
a. an increase in the externalities associated with producing goods b. mandatory recycling c. an increase in private costs of producing goods d. a narrowing of the gap between private and social costs of producing goods
What type of technology can reduce the amount of externality generated for a given rat eof output by altering the production process?
a. marginal technology b. variable technology c. fixed production technology d. cutting edge technology