In a one-period economy, real consumption
A) is always less than disposable income.
B) is typically greater than disposable income.
C) is exactly equal to disposable income.
D) can be greater than, less than, or equal to disposable income.
C
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Explain the concept of network externalities
What will be an ideal response?
An example of moral hazard is
a. people drive as carefully in icy conditions with antilock brakes as without b. people drive as safely with more airbags as without c. football players avoid 'spearing' with their heads even with safer helmets d. people fail to read the medicine warnings more often when self-medicating versus with a doctor's prescription
Refer to the above figure. The market supply and demand curves in a perfectly competitive market intersect at $4. Which of the graphs represent the situation for an individual firm?
A. Panel A B. Panel B C. Panel C D. Panel D
Use the following production possibilities frontiers to answer the next question.
Curve (a) is the initial frontier for the economy, and the nation is initially producing combination P. A shift from curve (a) to curve (b) suggests that the economy can then increase its production of capital goods
A. so as to produce the combination L. B. and consumer goods simultaneously, except at the point where the curve intersects the vertical axis. C. but will have to hold constant its production of consumer goods. D. only if it reduces its production of consumer goods.