Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas. To Lonnie
A) raspberries and papayas are complements.
B) raspberries and papayas are inferior goods.
C) raspberries and papayas are normal goods.
D) raspberries and papayas are substitutes.
Answer: D
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Assume that the graphs show a competitive market for the product stated in the question below.
Select the graph above that best shows the change in the market following a reduction in the tax placed on the suppliers in the market.
A. graph (1) B. graph (2) C. graph (3) D. graph (4)
In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Planned aggregate expenditure equals:
A. 320 + 0.25Y. B. 320 + 0.75Y. C. 290 + 0.25Y. D. 290 + 0.75Y.
For most people, as their income increases, their utility from that income ________ at a(n) ________ rate.
A. decreases; increasing B. increases; increasing C. decreases; decreasing D. increases; decreasing
Related to the Economics in Practice on p. 478: According to the "paradox of thrift," increased efforts to save will cause a(n)
A. decrease in income but an increase in saving. B. increase in income and an increase in overall saving. C. increase in income but no overall change in saving. D. decrease in income and an overall decrease in saving.