A study of expenditures on food in cities resulting in the following equation: Log E = 0.693 Log Y + 0.224 Log N where E is Food Expenditures; Y is total expenditures on goods and services; and N is the size of the family. This evidence implies:
a. that as total expenditures on goods and services rises, food expenditures falls.
b. that a one-percent increase in family size increases food expenditures .693%.
c. that a one-percent increase in family size increases food expenditures .224%.
d. that a one-percent increase in total expenditures increases food expenditures 1%.
e. that as family size increases, food expenditures go down.
c
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In the Keynesian model, consumption depends on:
A. the natural rate of unemployment. B. potential output. C. disposable income. D. whether the government has a budget surplus or deficit.
The slope of the indifference curve between steak and lobster is always equal to the ratio of their prices
Indicate whether the statement is true or false
Which of the following is cited as a problem with the kinked demand curve model?
A) It assumes that firms do not attempt to maximize profits. B) It assumes that firms determine the profit-maximizing level of output by equating marginal cost and average variable cost. C) It does not explain how the equilibrium market price is determined. D) It does not explain the price stickiness that is routinely observed in oligopolistic markets.
According to the efficient market hypothesis, which of the following statements is not correct?
a. Stock market prices tend to rise today if they rose yesterday. b. As judged by the typical person in the market, all stocks are fairly valued all the time. c. At the market price, the number of shares being offered for sale matches the number of shares people want to buy. d. All of the above statements are incorrect.