Refer to the diagram. If the budget line shifts from ab to ac, the:
A. consumer's level of total utility will increase.
B. consumer will purchase more of both J and K.
C. consumer will purchase less of both J and K.
D. consumer will purchase more of J and less of K.
D. consumer will purchase more of J and less of K.
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In which market model is there mutual interdependence?
A. Monopolistic competition. B. Pure competition. C. Oligopoly. D. Pure monopoly.
Suppose there is an increase in tax payments, T, of $300 billion in this economy. Given your consumption function and no other changes, what is the change in consumption given this change in tax payments?
Consider an individual consumption function, which is the standard textbook consumption function, that is, has a y-intercept of autonomous consumption and is linear in the disposable income. Assume that the slope of this consumption function equals 0.7, and that the autonomous consumption equals $20 billion in the aggregate economy.