The consumption function shows the relationship between consumer expenditures and:
A. the interest rate.
B. the tax rate.
C. savings.
D. disposable income.
Answer: D
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In a market for apples, a consumer purchases 30 pounds when the price of apples is $1 per pound and the consumer's income is $5,000 per month
When the price of apples increases to $2 per pound, without any change in the consumer's income, he decides to purchase only 15 pounds of apples. Suppose, after a given period of time, the consumer's income falls to $3,000 per month. His consumption of apples also decreases to 10 pounds. Using a graph, illustrate the difference between change in quantity demanded and the change in demand for apples.
According to structural stagnationists, when workers lose their jobs in the tradable sector, they are pressured to:
A. lower their reservation wage. B. keep their reservation wage the same as before their job loss. C. lower their reservation initially, but out of regret, increase it. D. increase their reservation wage.