Suppose the value of income elasticity of demand for a private college education is equal to 1.5. This means that:
A. every $1 increase in income provides an incentive for a $1.50 increase in expenditures on private college education.
B. a 10 percent decrease in private college tuition will have a large enough income effect to increase spending on private college education by 15 percent.
C. a 10 percent increase in income causes a 15 percent increase in the quantity of private college education purchased.
D. a 15 percent increase in income causes a 10 percent increase in the quantity of private college education purchased.
Answer: C
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Describe the single supervisory mechanism or SSM proposed by EU leaders in June of 2012
What will be an ideal response?
Hamburger is an inferior good. If the price of hamburger increases,
a. the income effect on the demand for hamburger will reinforce the substitution effect b. the income effect on the supply of hamburger will reinforce the substitution effect c. the budget line will rotate outward d. the budget line will shift outwards e. the income effect on the demand for hamburger will offset, to some degree, the substitution effect
In the Keynesian model, an increase in real autonomous spending results in a greater increase in real Gross Domestic Product (GDP) if
A) the marginal propensity to consume (MPC) is lower.
B) the marginal propensity to consume (MPC) is higher.
C) the average propensity to save (APS) is higher.
D) the average propensity to save (APS) is lower.
Refer to the information provided in Figure 3.13 below to answer the question(s) that follow.
Figure 3.13Refer to Figure 3.13. Assume hamburgers and french fries are complements. An increase in the price of french fries will cause a movement from
A. Point A to Point B. B. D2 to D1. C. Point B to Point A. D. D1 to D2.