Exhibit 8-2 Consumption function
As shown in Exhibit 8-2, the 450 line represents:
A. autonomous consumption.
B. real consumption spending.
C. real disposable income.
D. all points where real consumption equals real disposable income.
Answer: D
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Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit and the firm is making an accounting profit of $3000 . What is the firm's total costs?
a. $10,000 b. $11,000 c. $12,000 d. $13,000
Which statement about price elasticity of demand along a linear demand curve is true?
A. As the quantity demanded increases, so does the buyer's sensitivity to price. B. When price elasticity of demand is equal to 1, consumers are indifferent to subtle price changes. C. The ratio of current price to quantity demanded is a good estimate of the elasticity of demand. D. As the prices of goods increase, the elasticity of demand increases.
The marginal benefit to society of reducing pollution declines with increases in pollution abatement because of the law of:
A. increasing costs. B. diminishing returns. C. diminishing marginal utility. D. conservation of matter and energy.
Craft unions exert market control by
A) limiting the demand for labor. B) limiting the supply of labor. C) setting minimum wages. D) setting maximum wages.