If the government increases the income tax rate:
A. disposable income decreases.
B. disposable income increases.
C. disposable income remains unaffected.
D. total income increases.
A. disposable income decreases.
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According to the permanent-income hypothesis, a permanent increase in a person's income will
A) increase consumption more than savings. B) increase savings more than consumption. C) be smoothed out to where the increases in consumption and savings are roughly equal. D) have the same effect on consumption as a transitory increase in income.
In comparing monopolistic competition to perfect competition, one can conclude that the lack of free entry is the key to having the ability to set price
Indicate whether the statement is true or false
Zachary spends his day studying for a total of four hours and exercising for one hour. Using the concept of utility to explain his choices, we can say
A. the total utility gained from exercising for one hour is greater than the total utility from studying for four hours. B. the marginal utility of exercising for the first hour was greater than the marginal utility of studying for the first hour. C. the marginal utility of studying for a fifth hour will be negative. D. the marginal utility from studying for a fifth hour is less than the marginal utility from the first hour of exercise.
If Q represents a firm's level of output, W represents the wage paid to labor (L) and R is the cost of capital (K), then which of the following represents the firm's isocost line?
A. C = FC + VC(Q) B. C = FC(Q) + VC(Q) C. C = WL + RK D. C = (W + R)Q