Which of the following will most likely have the greatest effect on an individual’s consumption function?
A. Winning a small amount in the lottery
B. A one-time tuition grant
C. A week of high overtime pay
D. An inheritance paying a modest annual dividend
Answer: D
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Brand name aspirin is chemically identical to store brand aspirin. Yet, consumers often prefer the brand name product to the store brand product. This preference is an example of
A) product differentiation. B) perfect product competition. C) oligopolistic product competition. D) price taking behavior.
The quantity theory of money states that in the long run
A) the price level will not consistently rise, it will fluctuate. B) an increase in the quantity of money results in an equal percentage increase in the price level. C) a rise in the price level rises causes the quantity of money to increase. D) an increase in the quantity of money increases real GDP by a smaller percentage.