The MPC can be defined as the
A. change in income divided by the change in consumption.
B. ratio of income to saving.
C. change in consumption divided by the change in income.
D. ratio of saving to consumption.
Answer: C
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If Fred's marginal rate of substitution of salad for pizza equals 5, then
A) he would give up 5 pizzas to get the next salad. B) he would give up 5 salads to get the next pizza. C) he will eat five times as much pizza as salad. D) he will eat five times as much salad as pizza.
Monopolistic competition and perfect competition are different in that monopolistically competitive firms: a. cannot earn profits in the short run
b. face firm demand curves that are less elastic than perfectly competitive firms. c. face substantial barriers to entry. d. earn economic profits in the long run.
You would be inclined to bid on a good at an auction if
a. its MU/P was higher than those for other goods you consume b. its MU/P was lower than those for other goods you consume c. the consumer surplus was less than its price d. the consumer surplus was greater than the marginal utility from consuming the good e. the marginal utility was higher than its price
Which of the following factors is likely to increase the amount of available labor and decrease the real wages of workers?
A) in increase in the supply of capital stock B) a large number of factory closings C) consumers demanding more goods D) a high influx of immigration