In the graph for the consumption function, the 45-degree line
A) contains only a consumption component.
B) represents both planned consumption and planned investment.
C) shows various combinations where planned consumption equals real disposable income.
D) reflects a decreasing APC as real disposable income rises.
Answer: C) shows various combinations where planned consumption equals real disposable income.
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Steve is in a consumer equilibrium. Then, the price of steak increases from $6 a pound to $8 a pound. Steve decreases the number of pounds of steaks he buys each week ________
A) and decreases his total utility B) only if his income also decreases C) so that the marginal utility per dollar spent on steaks is the same as it was when the price was $6 a pound D) so that both his total utility and his marginal utility from steak fall
Most policy makers agree that in the long run, changes in the money supply influence _____
Fill in the blank(s) with the appropriate word(s).
A change in the money wage rate shifts...
What will be an ideal response?
Lilliput imports rope from Brobdingnag, where rope producers are subsidized by the government because of their great political clout. The most efficient policy from the standpoint of Lilliput is to
a. continue trading at the subsidized price. b. stop trading with Brobdingnag. c. place a tariff on rope imports to offset the subsidy. d. give a similar subsidy to the rope producers of Lilliput.