Refer to the information provided in Figure 2.4 below to answer the question(s) that follow. Figure 2.4According to Figure 2.4, Point E necessarily represents

By the permanent-income hypothesis, for every dollar that actual income increases, consumption expenditure rises in the short run by ________ dollars

A) kj B) k + j C) k/j D) k - j E) j + (1/k)

An example of moral hazard is

a. A taxi driver paid per mile taking the shortest route b. a piece-rate garment worker shirking more than a per jour worker c. an hourly salesman working less hard than a commission salesman d. an author on contract going to as many book signings as one with a percentage royalty rate