John has $40 to spend on pizza and tacos. Pizza costs $10 each and tacos are $1 per taco. John's real income ________
A) is $40
B) is 4 pizzas or 40 tacos
C) is 4 pizzas plus 40 tacos
D) depends only on his money wage
B
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The switch to the use of ethanol in gasoline is driven primarily by its relatively lower price. Assuming a competitive market, what effect would this change have on the equilibrium price and output for gasoline?
A) Price rises, output falls. B) Price falls, output rises. C) Price rises, output rises. D) Price falls, output falls.
In the Keynesian model, an increase in real autonomous spending results in a greater increase in real Gross Domestic Product (GDP) if
A) the marginal propensity to consume (MPC) is lower. B) the marginal propensity to consume (MPC) is higher. C) the average propensity to save (APS) is higher. D) the average propensity to save (APS) is lower.