If the marginal propensity to save is 0.25, then a $10,000 decrease in disposable income will
A) increase consumption by $7,500. B) decrease consumption by $2,500.
C) increase consumption by $2,500. D) decrease consumption by $7,500.
D
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When the marginal social cost of the production of Good A is greater than the marginal private cost of the production of Good A, then
A) a competitive, unregulated market produces less than the efficient quantity of Good A. B) a competitive, unregulated market produces the efficient quantity of Good A. C) a competitive, unregulated market produces more than the efficient quantity of Good A. D) the government should levy a tax on the production of Good A that is equal to the horizontal distance between the two marginal cost curves.
Suppose that iPhones are normal goods. If the income of iPhone users decreases, you predict that in the market for iPhones
A. both equilibrium price and quantity will increase. B. both equilibrium price and quantity will fall. C. equilibrium price will fall but quantity will increase. D. equilibrium price will increase and quantity will decrease.