You view tea and scones as perfect complements, and the corners of the indifference curves lie on the 45-degree line. Tea is plotted along the horizontal axis of the indifference map
Also, at your current point of consumption, you have not fully exhausted the available budget, and you consume more tea than scones. Based on this information, which of the following statements is NOT true? A) The marginal utility of tea equals zero for your current consumption bundle.
B) The marginal utility of scones equals zero for your current consumption bundle.
C) To reach the point of optimal consumption, you must increase your scone consumption.
D) The equal marginal principle does not have to be satisfied at the optimal consumption point for this problem.
B
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Suppose marginal propensity to consume (MPC) is 0.7 and there is a $1,000 increase in autonomous consumption. Given this information, real GDP will increase by
A) $3,333.
B) $1,429.
C) $1,000.
D) $700.
As a result of a decline in interest rates and a rise in household income, the demand curve for housing has shifted to the right, but has retained the same slope. Consequently, the elasticity of demand for housing
a. has declined. b. has increased. c. has remained unchanged. d. cannot be compared.
Which of the following will cause an outward (rightward) shift in the supply curve?
A. an increase in the price of labor input B. a reduction in the price of the good C. technological progress D. an increase in the number of consumers
Which of the following describes a problem created by scarcity?
A. The course you need to take in the fall is offered at times that conflict with your work schedule. B. Your cell phone battery is low and you screen a phone call from a friend in case your significant other calls later. C. The White House eliminates tours due to budget constraints. D. All of these.