The five most important variables that determine the level of consumption are
A) disposable income, wealth, expected future income, price level, and interest rate.
B) wealth, savings account balances, checking account balances, stock portfolio balances, and bond portfolio balances.
C) government purchases, saving account balances, wealth, interest rates, portfolio balances.
D) government purchases, interest rates, income, taxes, and transfers.
A
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Country A has a more equal distribution of income than country B if
A) country A's Lorenz curve is closer to the line of equality than is country B's Lorenz curve. B) country B's Lorenz curve is closer to the line of equality than is country A's Lorenz curve. C) country A's Lorenz curve is just as close to the line of equality as is country B's Lorenz curve. D) None of the above because it is impossible to compare income inequalities across countries.
A firm that is producing the quantity at which marginal cost exceeds both average total cost and the market price will increase its economic profit by _______
A. producing a larger quantity B. raising the price to equal marginal cost C. producing a smaller quantity D. producing the quantity that minimizes average total cost