In Figure 9.2, if the consumption function shifts from C1 to C2, it can be determined that the
A. APC has increased and the MPC has stayed the same at each income level.
B. MPC and APC have decreased at each income level.
C. MPC has increased and the APC has stayed the same at each income level.
D. MPC and APC have increased at each income level.
Answer: D
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A demerit good is a good that __________
Fill in the blank(s) with the appropriate word(s).
Economists generally assume
A) individuals act strictly in the public interest. B) individuals are never concerned with the interests of other people. C) individuals rarely promote the projects in which they are interested. D) none of the above.
Refer to the above figure. If the farmer is producing 4,000 bushels of beans and 38,000 bushels of wheat, then we know the farmer
A) is using resources efficiently. B) is producing too much wheat. C) is inefficient because point a is the most efficient point on the curve. D) must be using more resources than were assumed available in constructing the graph.
If capital is not being used efficiently, an economy cannot be operating at a point along its production possibilities frontier
a. True b. False