The reason individual homeowners usually do not hire a private contractor to fill the potholes on their street is because
a. there are positive externalities associated with the potholes
b. the value to the neighborhood exceeds the cost of repair
c. it costs them more than the benefits they derive
d. they do not trust the government
e. there are negative externalities associated with the repair
C
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A change in any of the following factors EXCEPT ________ shifts the aggregate demand curve
A) expectations about the future B) the money wage rate C) monetary and fiscal policy D) foreign income E) the foreign exchange rate
Which of the following is true concerning the income effect of a decrease in price?
A) It will lead to an increase in consumption only for a normal good. B) It always will lead to an increase in consumption. C) It will lead to an increase in consumption only for an inferior good. D) It will lead to an increase in consumption only for a Giffen good.