A change in taxes of a given amount shifts the consumption function vertically by ____ than that amount, because the marginal propensity to consume is ____
a. less; less than 1
b. greater; greater than 1
c. greater; always equal to 1.
d. less; equal to zero.
a
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Which of the following accurately explains the difference between slope and elasticity?
a. Slope uses percentage points; elasticity uses equilibrium points. b. Slope uses equilibrium points; elasticity uses percentage points. c. Slope uses relative percentage changes; elasticity uses units of measurement. d. Slope uses units of measurement; elasticity uses relative percentage changes.
If the demand for gasoline becomes more elastic over time,
A. the demand curve will shift out. B. the demand curve will become flatter. C. other things being equal, the equilibrium price of gasoline must fall. D. other things being equal, the equilibrium quantity of gasoline must fall.