Quinn's income to spend each month on two normal goods, bowling or eating out, is $100. It costs $10 to bowl for the night, and it costs $20 for Quinn to eat at a restaurant. Quinn currently consumes four nights of bowling and three meals at a restaurant. If the price of bowling increased to $15, the income effect would predict:
A. Quinn would consume more of each good.
B. Quinn would consume less of each good.
C. Quinn would consume more bowling and less meals out.
D. Quinn would consume less bowling and more meals out.
B. Quinn would consume less of each good.
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In an economist's view, a cartel usually offers to society
a. all the cost benefits of large-scale production and none of the allocative inefficiencies of monopoly. b. all the cost benefits of large-scale production and all of the allocative inefficiencies of monopoly. c. none of the cost benefits of large-scale production and none of the allocative inefficiencies of monopoly. d. none of the cost benefits of large-scale production and all of the allocative inefficiencies of monopoly.
During the stock market crash of October 1987, the Fed
a. raised the discount rate. b. raised reserve requirements. c. increased lending to member banks. d. sold government securities.
The fair or flat tax suggested to make the income tax system more fair to the citizens would result in
A. decreasing the impact of automatic stabilizers. B. increasing the impact of automatic stabilizers. C. generate a larger revenue to the federal government and decrease deficits. D. not affect the effectiveness of automatic stabilizers.
A surplus will occur if a ________ is set ________ the equilibrium price.
A. price ceiling; above B. price floor; below C. price floor; above D. price ceiling; below