Average costs_____ initially due to the presence of fixed costs and then _____due to increasing marginal costs

If the government reduces spending ________

A) the IS curve will shift to the right B) output will increase if interest rates remain fixed C) consumption will increase D) all of the above E) none of the above

If John purchases 10 percent more compact discs when his income increases 5 percent, then:

a. his total expenditure on compact discs will fall as his income increases. b. compact discs would be classified as an inferior good. c. compact discs would be price elastic. d. compact discs would be income inelastic. e. compact discs would be income elastic.