The relationship between consumer spending and disposable income is called the
a. conjunction function.
b. consumption function.
c. aggregate demand function.
d. marginal spending function.
b
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Suppose ordinarily half your class would get an A and half would get a B, with A students having a 25% chance of getting an A and B students having a 25% of getting an A. It costs $100 to persuade the instructor to raise a B grade to an A. A student is willing to pay $40 to insure she will get her usual grade and $70 to insure she will get a higher grade than usual. a. Who would buy insurance and at what price in a competitive equilibrium?
b. Suppose it costs $5 to truthfully signal your type and $10 to falsely signal what type of student you are, and if an insurance company receives no signal, it will interpret this as a signal that you are a B student. What would be the competitive outcome now? c. Suppose a new teacher comes in -- and this teacher is willing to change a grade for just $60. How does your answer to (a) change? d. How would your answer to (b) change? e. Can you change something in the problem that would result in only A-students buying insurance? What will be an ideal response?
Refer to the scenario above. Which of the following is the optimum choice?
A) Apartment Very Close B) Apartment Close C) Apartment Far D) Apartment Very Far
"Discouraged" workers are counted as "unemployed."
Indicate whether the statement is true or false
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point A to Point D. This could be explained by
A. an increase in economic growth. B. a change in society's preferences for motorcycles versus hybrid cars. C. a reduction in unemployment. D. an improvement in technology.