Consumption functions would shift downward if
A. disposable incomes fall.
B. disposable incomes rise.
C. price levels fall.
D. price levels rise.
Answer: D
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One of the reasons that pollution problems are as large as they are is that
A. markets let individuals and firms deplete valuable resources without charging money for doing so. B. markets are incapable of incorporating valuable resources such as air and pure water. C. governments use resources without paying for them the way that individuals and firms must. D. markets are not an efficient means to address scarcity.
If C represents aggregate consumption, Id represents domestic investments, G represents government expenditures, E represents national expenditures on goods and services, X represents foreign demands for exports, and M represents domestic demand for imports, then aggregate demand for this country equals
A. C + Id + G + (X - M). B. E + C + Id + (X - M). C. E + (M - X). D. C + Id + G.
If marginal utility is zero
A) total utility increases at a decreasing rate. B) total utility increases at an increasing rate. C) total utility is at a maximum. D) people will consume more of the good only if the price is zero.
A consumer will achieve the highest level of utility possible when she consumes
A) at the point at which the highest indifference curve is tangent to the budget constraint. B) at the point at which the indifference curve crosses the budget constraint. C) at a point to the left of the budget constraint. D) just below the point where the indifference curve crosses the budget constraint.