If you spend a large portion of your income on a good,
A) supply of that good would be price elastic.
B) demand for that good is more elastic than if you spent a smaller portion of your income on the good.
C) supply of that good is price inelastic.
D) demand for that good is less elastic than if you spent a smaller portion of your income on the good.
E) the good must be able to be produced at a constant (or gently rising) opportunity cost.
B
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"Any tax cut to increase demand for output should favor lower-income people" is a ________ statement about ________ policy.
A. normative; fiscal B. positive; monetary C. normative; monetary D. positive; fiscal
If the demand curve for a good is horizontal, a tax is levied on this product is
A) split between the buyers and the sellers but not evenly so that either the buyer or the seller pays more. B) split evenly between the buyers and the sellers. C) paid entirely by buyers. D) paid entirely by sellers. E) not paid by either the buyers or the sellers.
If the government imposes a price ceiling, then:
a. producers must charge the ceiling price. b. the price offered by producers must be at or above the ceiling price. c. the price offered by producers must be at or below the ceiling price. d. producers would be inclined to increase the quantity supplied. e. the market supply curve will shift to the right.
If George's MPS is 0.75 and he earns an additional $1,000, how much would he spend?
a. $250 b. $750 c. $1,333 d. $4,000