What are the five main determinants of consumption spending? Which of these is the most important?
What will be an ideal response?
The five main determinants of consumption spending are current disposable income, household wealth, expected future income, the price level, and the interest rate. The most important determinant is current disposable income.
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A microeconomic model CANNOT be used to
A) evaluate the impact of a price change on a firm's revenue. B) predict the impact on a rise of the minimum wage on unemployment. C) evaluate the fairness of the proposal to nationalize health insurance. D) evaluate the effect of an increase in stadium size on the price of a sport team's tickets.
A farmer owns 10 acres of land on which both soybean and corn can be grown. If he increases the production of corn, _____
a. the output of soybean must fall b. the demand curve for soybean must shift leftward c. the demand curve for corn must shift rightward d. the output of soybean must increase too