A decrease in government expenditure on goods and services
A) increases aggregate demand.
B) increases the aggregate quantity demanded.
C) decreases the aggregate quantity demanded.
D) decreases aggregate demand.
D
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Rob took the afternoon off from his job as a tire salesman to mow his lawn. Rob told his wife that this made sense because he would be saving the $50 he would have to pay a lawn service, noting that this would be the opportunity cost to the family. Rob’s wife disagreed. What did Rob’s wife say?
A. The opportunity cost would be Rob’s lost income from selling tires that afternoon plus the $50. B. The opportunity cost would be Rob’s lost income from selling tires that afternoon minus the $50. C. That Rob just wanted to take the afternoon off. D. The opportunity cost would be Rob’s lost income from selling tires that afternoon.
Suppose that many consumers tend to over-state the discount rate that should be used for computing the net present value of education, just as they do when making investments in durable goods like cars and appliances
What would happen if consumers (as a group) started to use lower discount rates when making decisions about their education? A) NPV of a degree declines, demand for eduction declines B) NPV of a degree declines, demand for education increases C) NPV of a degree increases, demand for education declines D) NPV of a degree increases, demand for education increases
An insurance company offering both high-deductible and low-deductible plans is an example of:
A. signaling. B. statistical discrimination. C. building a reputation. D. screening.
If the demand for a good is elastic, then
A) people do not change the quantity they demand when the price of the good changes. B) a change in price leads to a smaller percentage change in the quantity demanded. C) people substantially decrease the quantity of the good they buy if its price increases by a small percentage. D) a change in the quantity demanded is smaller than the change in price. E) the quantity demanded divided by the price exceeds 1.00.