Suppose the value of income elasticity of demand for a private college education is equal to 1.5 . This means that
a. every $1 increase in income provides an incentive for a $1.50 increase in expenditures on private college education
b. every $1.50 increase in income provides an incentive for a $1 increase in expenditures on private college education
c. a 10 percent increase in income causes a 15 percent increase in the quantity of private college education purchased
d. a 15 percent increase in income causes a 10 percent increase in the quantity of private college education purchased
e. a 10 percent decrease in private college tuition will have a large enough income effect to increase spending on private college education by 15 percent
C
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Regulating the amount of money in the United States is one of the most important responsibilities of the
A) State Department. B) state governments. C) Treasury Department. D) Federal Reserve. E) U.S. Mint.
The expenditure approach to measuring GDP is based on summing
A) wages, interest, rent, and profit. B) each industry's production. C) the total values of final goods, intermediate goods and services, used goods, and financial assets. D) consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services. E) consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services minus wages, interest, rent, and profit.
Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is the difference in the deadweight loss compared to a monopoly in this market?
A. A monopoly would create $6,666.67 more deadweight loss B. A monopoly would create $6,666.67 less deadweight loss C. A monopoly would create $5,555.56 more deadweight loss D. A monopoly would create $5,555.56 less deadweight loss
Which of the following is a measure taken by the government to internalize externalities?
a. Value Added Tax b. Income Tax c. Cap and trade d. Tariffs e. Deficit financing