Figure 11-3
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In Figure 11-3, which line represents the change in the consumption schedule caused by a cut in the personal income tax as advocated by President George W. Bush in 2001?
A. C1 in graph (a)
B. C2 in graph (a)
C. C1 in graph (b)
D. C2 in graph (b)
Answer: D
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Which of the following observations is true?
A. Free markets will achieve all of society’s goals. B. The ability to buy goods is divided equally among consumers. C. The market leads to efficiency in production through the profit motive. D. The market system encourages firms to use inputs wastefully.
A large government debt increases the amount of capital in the economy and thereby increases future incomes and real wages
Indicate whether the statement is true or false
If an economist believes that choice architecture is important, he or she is more likely to be a:
A. Keynesian economist. B. traditional economist. C. formal economist. D. behavioral economist.
Which of the following examples of product differentiation uses prestige?
a. A cheese company advertises that it uses only milk from grass-fed cows. b. An automobile company advertises that it recently won Best Car of the Year. c. A chain coffee store advertises its many locations. d. A fast-food restaurant advertises service under five minutes per customer.