Shel and Fran are neighbors. They work at the same firm and hold the same title. Shel finds that when Fran's consumption rises, Shel feels worse off. Fran feels the same way about Shel's consumption. Fran has bought a new Jaguar (a luxury car), and shortly thereafter, Shel bought a new Mercedes (also a luxury car). Shel and Fran seem to be:
A. imposing external benefits on each other.
B. unaware of the other's actions.
C. involved in a positional arms race.
D. making independent rational consumption decisions.
Answer: C
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An increase in the education level inside a nation would cause the:
A. long-run aggregate supply curve to shift to the right. B. long-run aggregate supply curve to shift to the left. C. short-run aggregate supply curve to shift to the left. D. aggregate demand curve to shift to the right.
Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30 . Total consumer surplus for these three would be
a. $15. b. $30. c. $45. d. $90.
Label the break-even point.
Refer to the information. The multiplier in this economy is:
A. 4.
B. 5.
C. 2.5.
D. 3.5.