Explain the difference between induced consumption expenditure and autonomous consumption expenditure. Why isn't all consumption expenditure induced expenditure?
What will be an ideal response?
Induced consumption expenditure is consumption expenditure that changes when disposable income changes. Autonomous consumption expenditure is consumption expenditure that would occur in the short run even if disposable income was zero. Not all consumption expenditure is induced consumption expenditure because, in the short run, even if someone has no income they still will have some (autonomous) consumption expenditure, if for nothing else, for food.
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In the figure above, for each CD, the price a consumer is willing to pay is equal to the
A) economy's marginal social cost of producing that CD. B) consumer's own marginal benefit from consuming that CD. C) consumer's total consumer surplus. D) Both answers A and B are correct.
At any quantity, the marginal factor cost is always
A) parallel to the marginal revenue product. B) below the labor supply curve. C) above the labor supply curve. D) above the labor demand curve.
The United States is an example of a mixed economy
a. True b. False Indicate whether the statement is true or false
Unemployment refers to a situation in which an individual: a. prefers part-time work rather than full-time work
b. has given up looking for a job because he is discouraged about his prospects. c. is looking for a job but is unable to find one. d. is jobless and also not looking for a job.