Which of the following is the best example of a public good?
a. Apples. b. Cars.
c. Education. d. National defense.
d
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People complain that inflation increases the cost of goods and services and therefore reduces their purchasing power. If inflation and income grow at the same rate, is this complaint valid? Explain carefully
What will be an ideal response?
The consumption function assumes that:
a. only disposable income affects consumption b. only the price level affects consumption. c. many factors other than disposable income affect consumption, and each is allowed to vary along the consumption function. d. factors other than disposable income affect consumption, but those are held constant along the consumption function. e. only consumer expectations affect consumption.
The difference between the earnings of construction workers who work on bridges and skyscrapers and those who work on highways is most likely due to
a. differences in education requirements. b. differences in unionization rates. c. a compensating differential. d. apprenticeship requirements.
Which of the following items would be least prudent to purchase on credit
A) a college education B) a vacation C) a house D) an automobile