Which of the following is true of the consumption function?
a. A decrease in flat tax results in an upward shift of the consumption function

b. An increase in interest rates results in an upward rotation of the consumption function.
c. An increase in the expected future income results in an upward rotation of the consumption function.
d. A decrease in the marginal propensity to save results in a downward shift of the consumption function.

a

Economics

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The study of the problems due to asymmetric information was begun when economists analyzed which type of market?

A) the market for automobiles B) farmers' markets C) the market for insurance D) the market for citrus fruit

Economics

Suppose that all workers place a value on their leisure of 75 goods per day. The production function relating output per day Y to the number of people working per day N is

Y = 500N - 0.4 N2, and the marginal product of labor is MPN = 500 - 0.8 N. A 25% tax is levied on wages. (a) How much is output per day? (b) In terms of lost output, what is the cost of the distortion introduced by this tax?

Economics